Wednesday, January 6, 2021

Union Wants Hedge Fund Members Off Tribune Media Board

The union representing the Chicago Tribune newsroom has called for the removal of three members of Tribune Publishing’s board who represent Alden Global Capital, the hedge fund trying to buy the newspaper chain and take it private, the paper is reporting.

Alden, which owns 32% of Tribune Publishing, made a non-binding proposal Dec. 14 to buy out other shareholders for $14.25 per share, with plans to take the Chicago-based newspaper company private. The hedge fund disclosed the offer in a Dec. 31 SEC filing.

In a letter Monday to Tribune Publishing Chairman Philip Franklin, the Chicago News Guild alleges the Alden representatives violated Securities and Exchange Commission rules by failing to disclose the offer to Tribune shareholders within 10 days.

“The union has its facts wrong and has reached several incorrect factual and legal conclusions,” Alden said in a statement Tuesday. “Most importantly, as our letter makes perfectly clear, our offer was made in conformance with legal and fiduciary requirements.”

Lisa Bragança, a securities attorney and former SEC enforcement branch chief in Chicago, said Alden was required to file its proposal to buy Tribune Publishing “promptly,” but that the 10-day rule applied only to an initial acquisition of a 5% or greater stake. Bragança is not involved in the dispute.

She said it may be up to regulators to determine if the 17-day lag between the offering and the filing was prompt enough.

The union alleges that Alden’s SEC filing was a “signed confession of corporate malfeasance” that put the hedge fund’s interest above the shareholders.

In addition to the Chicago Tribune, Tribune Publishing owns the Baltimore Sun; Hartford Courant; Orlando Sentinel; South Florida Sun Sentinel; New York Daily News; the Capital Gazette in Annapolis, Maryland; The Morning Call in Allentown, Pennsylvania; the Daily Press in Newport News, Virginia; and The Virginian-Pilot in Norfolk, Virginia.

A New York-based hedge fund with a reputation for sweeping layoffs at its newspaper properties, Alden owns about 200 publications through an operating company known as MediaNews Group.

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