They weren’t a dollar short, but they were a day late.

Jim Doti, winding down a celebrated 26-year run as president of Chapman University, launched a stealthy final-drive effort to buy bankrupt Freedom Communications with an eye on maintaining the independence and libertarian tradition of its flagship Orange County Register.

Doti’s frantically assembled group of 10 investors—among them wealthy civic leaders and persons familiar with the newspaper business, Freedom and real estate—tried to buy the company in late March after a Justice Department anti-trust challenge knocked out lead bidder Tribune Company, owner of the Los Angeles Times. The Doti group offered to match Tribune’s $56 million bid.

The timing was too tight for the creditors of Freedom—bankruptcy lender Silver Point Capital was in position to turn off the cash spigot at month’s end. Instead, on March 30, Freedom finalized the sale to newspaper chain Digital First Media for $50 million, $6 million less than Doti’s offer.

“We had Digital First beat,” Doti said.

So ends Freedom Communications’ run among the largest privately owned companies based in Orange County, the subject of this week’s special report. The media company is No. 91 on this year’s list of 118 private companies with more than $100 million in annual revenue, reflecting its final year of local ownership. (See related coverage, page 1; list starting on page 14).

The lawyer for Freedom, William Lobel of Costa Mesa bankruptcy specialist Lobel Weiland Golden Friedman, said Doti’s group came close. He said it made a financially superior offer that was “appreciated” by the creditors.

Timing was, indeed, everything in this case. Lobel said confirmation that all of the money was secured for Doti’s bid did not come until March 30, the same day the court approved a revised agreement with Digital First. The sale closed the next day.

A new deal would have taken days to complete; Doti said his investors needed “at least a week” for due diligence. But Jordy Spiegel, who runs the Dana Point private equity firm Spiegel Partners and worked with Doti on the offer, said Freedom “was on a very short fuse—they needed absolute certainty.” So, he surmised, the creditors went with Digital First as “the bird in hand.”

(Spiegel is familiar with the newspaper business: His hedge fund Mount Flag Media Investment took a 5% stake in Tribune last October.)

Lobel said nobody questioned the ability of Doti’s group to back its bid, but emphasized that nothing is certain until a deal closes: “What would we do if we called off the deal (with Digital First) and went with Doti, and then something happened and they didn’t have the money?”

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