NEW YORK (Reuters) – Sun-Times Media Group Inc., the bankrupt publisher of the Chicago Sun-Times, said on Tuesday that an investor group led by Chicago businessman James Tyree would be the lead bidder for its assets at a bankruptcy auction.
Tyree’s group, STMG Holdings LLC, which will be the company’s “stalking horse” bidder, has offered to buy the Sun-Times’ assets for $5 million in cash and assume its liabilities, estimated to total $20 million. Tyree is chief executive of financial services firm Mesirow Financial.
A “stalking horse bidder” submits a starting bid to set a floor under other possible offers in exchange for certain protections that can include break-up fees if it does not win.
The STMG bid is subject to results of an auction, if another bidder emerges, as well as court approval by a bankruptcy judge.
The Sun-Times filed in March for Chapter 11 bankruptcy protection at the U.S. Bankruptcy Court in Delaware.
Unlike other U.S. newspaper publishers that have sought bankruptcy protection in the past year, the Sun-Times is not simply facing an overwhelming debt load.
Instead, the U.S. Internal Revenue Service has said the company owes up to $608 million in back taxes and penalties, dating to when it was Hollinger International, controlled by now-imprisoned media baron Conrad Black.
Sun-Times’ other properties include the Beacon News in Aurora, Illinois, and the Post-Tribune in Merrillville, Indiana.
Other newspaper publishers that have sought bankruptcy protection include Chicago-based Tribune Co (TRBCQ.PK), Journal Register Co and the owner of The Philadelphia Inquirer and Philadelphia Daily News.
The case is In re: Sun-Times Media Group Inc, U.S. Bankruptcy Court, District of Delaware, No. 09-11092. (Reporting by Phil Wahba)