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Freedom Communications Inc. in Santa Ana is asking the U.S. Bankruptcy Court’s Central District of California to allow it to accept $4.5 million in financing from Silver Point Finance LLC.
Freedom said the debtor-in-possession package will enable Santa Ana-based publisher of the Orange County Register and Press-Enterprise in Riverside to operate its business during Chapter 11 bankruptcy proceedings and an upcoming auction of the company by the court.
The total of the loan is an increase from the Greenwich, Conn.-based hedge fund’s initial offer of $3 million, which has reportedly prompted Tribune Publishing Co. in Chicago, owner of the Los Angeles Times, to put a similar deal on the table.
The package from Silver Point figures into a bid for Freedom that’s expected by a group led by Chief Executive Rich Mirman, who also is publisher of the Register.
Tribune also is expected to be one of several bidders in the eventual bankruptcy auction of Freedom.
“Securing this loan is an important step in continuing to fund the business during the reorganization,” Mirman said in a statement.
He cited Silver Point’s “continued support” and said Freedom believes “the outcome will be in the best interests of Freedom and the communities we serve.”
Freedom also wants the court’s permission to hire Mosier & Company Inc. in Costa Mesa “as an independent sales representative to objectively oversee the company sale and bidding process.”
Freedom filed for Chapter 11 bankruptcy on Nov. 1, and said Mirman and Chairman Eric Spitz will likely join real estate developer Mike Harrah, the largest commercial property owner in Santa Ana, in an effort to buy the media company. The bid will include a “cash component, assumption of liabilities and the retention of the employee pension program,” according to Freedom.
The court is slated to decide next week on which debtor-in-possession financing offer will be accepted.