The U.S. Bankruptcy Court has approved the transfer of the Alaska Dispatch News to a group organized by the Binkley family on Monday, giving the state’s largest paper another few weeks of operating capital to navigate Chapter 11 bankruptcy.
The Binkley group, headed by Ryan Binkley, will take over control of the paper as it undergoes reorganization, supplying a loan of up to $1 million to cover operating expenses during that time. The ADN is set for a Sept. 11 sale that will be akin to an auction with proceeds going to repay first the Binkley loan then hundreds of other creditors owed millions of dollars.
The Alaska Dispatch News, the Binkley group and many creditors first met in court last Thursday and have been working to hash out agreements that allows the Binkleys to take over the paper since then. Satisfied by a number of deals cut over the weekend, most creditors lifted their objections to the maneuver and U.S. Bankruptcy Judge Gary Spraker overruled the remaining.
Chapter 7 potential
Monday’s court proceedings were peppered with talk about the growing possibility the ADN could end up in Chapter 7 bankruptcy. That form of bankruptcy would lead to a liquidation of the ADN’s assets to satisfy creditors. At one point, Spraker noted it was a “distinct possibility” for the paper.
The talk underscores the nature of the Binkley group’s intervention in the beleaguered paper. The court filings made by the Binkleys have made clear that they’re essentially kicking the tires on the organization and could still decide to walk away if the situation created by Alice Rogoff is too complicated and too expensive to unwind.
“Binkley company will continue to negotiate with vendors in the notice period,” Binkley attorney Erik LeRoy wrote in a brief last week. “But it is still excavating its way through the debtor’s contracts and financials and needs to be able to say at any time, ‘the numbers just won’t work, and it is time to fold.'”
Under either plan, the Binkley group stands to recoup whatever money it loans the company because it’s been granted a super priority status with its loan, putting it ahead of creditors like Northrim Bank, GCI and M&M Wiring.
Printing press problems
Though Northrim Bank and GCI signed off on the bankruptcy deal, the owners of the Arctic Boulevard warehouse that currently houses two ADN-owned non-functioning printing presses raised objections to the agreement. Jason Kettrick, an attorney for Arctic Partners, said they were worried they’d be stuck with two inoperable printing presses if the sale goes ahead. He noted that the printing presses will cost more to remove than they’re worth.
Erik LeRoy, the attorney for the Binkleys, said the company could get its money back if the Binkleys decide to fold and liquidate the paper under Chapter 7. LeRoy also said the Binkleys will likely not be buying the printing presses after asked by Spraker if they were interested in continuing the lease.
“No, we’re not interested in the lease,” he said. “The two printers in there we are interested in, but we are as fearful as Mr. Kettrick is about the cost and burden of removing them. We haven’t had enough time to have the experts come in and look at that and tell us how they would be removed. Those presses could be something we buy, or could be something included in the purchase. They are probably not going to be included in the purchase.”