HALIFAX — A Nova Scotia judge received good news Tuesday during an update on the proposed sale of SaltWire Network Inc. and The Halifax Herald Ltd., two financially troubled companies that operate Atlantic Canada's largest newspaper chain.
Those shepherding the restructuring process told Nova Scotia Supreme Court Justice John Keith that progress is being made toward securing a deal that could see all or part of the insolvent businesses sold to one or more bidders.
"Everything has unfolded the way it was supposed to," said lawyer George Benchetrit, who represents KSV Restructuring Inc., the monitor of the restructuring process under the Companies' Creditors Arrangement Act.
"It is important that you know that everything is on track," he told the judge.
On March 13 and again on March 22, Keith granted the companies protection from a long list of creditors owed about $90 million.
During the court hearing Tuesday, Keith granted another extension until June 28, and he asked about the companies' cash flow and their ability to pay suppliers.
KSV president Bobby Kofman told the judge: "I think co-operation has been very good .... The plan is unfolding according to the timeline," though he said revenue had declined slightly.
On March 11, a private lending firm filed court documents to initiate insolvency proceedings against SaltWire, The Herald and their related companies. Fiera Private Debt, the companies' senior secured lender, claims SaltWire and The Herald owe the firm $32 million after several years of mismanagement.
But rather than push the companies into receivership, Fiera has supported the restructuring process through a series of loans that have allowed them to keep operating. On Tuesday, Keith approved another $1.5 million in debtor in possession financing, bringing the total so far to $3 million.
Last week, a report from KSV confirmed that several unnamed bidders have submitted non-binding offers to buy all or part of the two companies. The report says some of those non-binding offers, if accepted, would allow the companies to continue operating as viable businesses.
The next step is for KSV to determine which bidders will be asked to submit binding offers by May 24 at 5 p.m., which could lead to court approval for a transaction no later than June 28 and an anticipated closing deadline of July 31.
With the help of the monitor, Keith will ultimately decide what deal will ensure the survival of the companies and allow the creditors to receive some form of payment for amounts owing.
"I hope we're dealing with more good news at the end of June," the judge said.
The Halifax Herald Ltd. owns The Chronicle Herald, the independent Halifax-based daily newspaper that was founded almost 200 years ago.
SaltWire Network Inc. owns other newspapers in Nova Scotia, P.E.I. and Newfoundland, including the Cape Breton Post in Sydney, N.S., the Guardian in Charlottetown and the Telegram in St. John's, N.L., as well as weekly papers and several digital publications.
They employ about 800 independent contractors and 390 staff, which includes about 108 unionized positions, according to court documents.
The companies are owned by Mark Lever and his wife Sarah Dennis. Lever, who recently stepped down as president and CEO of SaltWire, has said he planned to submit a bid for the media companies.
This report by The Canadian Press was first published April 30, 2024.
Michael MacDonald, The Canadian Press
