Chicago-area investor claims it blocked from developing Sun-Times bid, wants process reopened

Investor wants Sun-Times bidding process reopened

CHICAGO — There’s no one else interested in buying the bankrupt Chicago Sun-Times. Or is there?

Chicago-area businessman Thane Ritchie wants a judge to reopen bidding for the storied paper’s parent company, claiming he was wrongly blocked from forging a proposal with union officials before a deadline passed this week, Ritchie spokesman Justin Meise said Wednesday.

No new suitors filed bids for Sun-Times Media Group Inc. by Monday’s deadline, leaving just one bid on the table. That offer, from hometown investor Jim Tyree, appears to be a last hope of survival for the nation’s 15th largest newspaper that’s rapidly running out of cash.

Tyree has said he will walk away unless all the Sun-Times unions accept concessions, including locking in 15 percent pay cuts that were originally meant to be temporary. As of Wednesday, five had already rejected them, nine had agreed and two hadn’t yet voted.

Ritchie, a Lisle-based private equity manager, didn’t specify who allegedly threw the legal obstacles into his path, saying only that he had been warned that it would violate federal labor law if a potential buyer approached unions. Attorneys he asked disagreed.

“This is a travesty,” Ritchie said in a statement. “Why shouldn’t forward-looking private equity sources be able to form a coalition offer with a union, which represents the largest set of stakeholders here?”

The Sun-Times Media Group says it never thwarted anyone.

“Assertions that any party was improperly deterred from making a bid in this process are patently false,” the company’s general counsel, James McDonough, said in response to Ritchie.

Sun-Times executives hope a Delaware bankruptcy court will be able to OK the Tyree deal at a hearing on Thursday, though that would seem to depend on whether all the unions vote to accept the concessions by then.

Ritchie wants union representatives to ask the bankruptcy judge to reopen the bidding process for 30 more days, and also order that the Chicago Newspaper Guild can’t be prevented from working with Ritchie.

It wasn’t immediately clear if the union intended to put in such a request. A message left Wednesday for Tom Thibeault, executive director of the Chicago Newspaper Guild, which represents editorial workers at the Sun-Times newspapers, was not returned.

Tyree, who heads Mesirow Financial, a financial services firm, leads a group that has offered to pay $5 million for assets of the Sun-Times Media Group, which also runs more than 50 suburban publications. The investors also would assume about $22 million in liabilities.

Ritchie, the CEO of Ritchie Capital Management, hasn’t publicly discussed what he might offer for the Sun-Times, his spokesman said.

A judge said last month that Tyree and other parties to his deal should have until December to agree, but media group executives have said they don’t have the cash to hold out until then. They’ve said the company could shut down for good, jeopardizing more than 1,800 jobs.

If the Sun-Times goes under, that would leave this city of 3 million with one major daily, the Chicago Tribune, whose parent company is also operating under bankruptcy protection.

Sun-Times Media, which filed for Chapter 11 bankruptcy protection in March, citing $479 million in assets and $801 million in debt, has shed more than 400 jobs since late last year through layoffs and attrition.

The Chicago Sun-Times is the 15th largest newspaper based on circulation average 312,141 weekday and 254,379 Sunday circulation from October through March, according to the Audit Bureau of Circulations.