A federal bankruptcy court in Central Islip has approved the $26 million sale of Ohio-based newspaper chain Brown Publishing Co. to a group of company insiders led by current president and chief executive Roy Brown.
U.S. Bankruptcy Court Judge Dorothy Eisenberg ruled late Thursday that a newly formed Brown Media Corp. could purchase the majority of the chain, which includes the popular Hamptons weekly Dan's Papers for $22.4 million.
She also approved the purchase of two of Brown's Ohio papers -- the Van Wert Times-Bulletin, a daily, and the Ada Herald, a weekly -- for $3.6 million to the Delphos Herald Inc.
Dan's Papers, sometimes called the Bible of the Hamptons, was sold to Brown in July 2007. The founder, and Hamptons fixture, Dan Rattiner, said at that time that he would remain on the News Communications board.
The judge, who conducted hearings over two days before approving the sale, did reject one aspect of the proposed deal: the sale of three real estate parcels in Ohio. Brown Media was the lone bidder on the properties, offering $10,000 for parcels in Urbana, Xenia and Bellevue, Ohio.
Eisenberg said she found that the properties, which were valued at several hundred thousand dollars, had not been properly marketed for the highest possible sale price. Nevertheless, she said the remainder of the proposed sale could proceed.
Edward Fox, an attorney who represented Brown Publishing, said he was pleased with the judge's ruling, which he claimed would save 800 jobs. "We're very happy that business will continue," Fox said.
Thomas Clark Carlson, an investment banker appointed to oversee the sale, echoed the attorney's comments.
"I'm pleased the court gave its approval," he said moments after the judge made the ruling late Thursday afternoon. "We're happy to be going forward with the sale."
Brown Media Holdings Co. and Brown Publishing Co. filed for Chapter 11 bankruptcy relief in May.