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Pension plans claiming they were owed about $40 million from the bankruptcy of the Boston Herald have reached a settlement with the remnants of the newspaper company and with its former publisher.
Terms of the agreement include allowing the New England Teamsters & Trucking Industry Pension Fund to have a $13 million claim, less than half of the $29 million claim originally sought, according to papers filed Thursday in U.S. Bankruptcy Court in Wilmington, Del. In bankruptcy, a claim is a right to payment, whether it is eventually reduced or disputed.
William Baldiga, a Brown Rudnick LLP lawyer representing the paper’s former owner HMH Media Inc. and related affiliates, said the pension plans’ claims, which are mostly unsecured in the settlement, will likely receive about 6 cents to 10 cents on the dollar of the allowed claims. That means the Teamsters’ claims are likely to receive about $1.3 million at most under the agreement.
Two other pension plans are also part of the settlement.
The proposed debt-repayment plan also calls for former Boston Herald publisher Patrick Purcell to waive various claims, including severance, in exchange for a release, or a grant of legal immunity.
An independent director for HMH Media has reviewed the Purcell claims “and assessed whether Mr. Purcell might be liable” to the reorganized businesses, Thursday’s court filing said. That director recommended that the agreement resolving the claims of Mr. Purcell and the pension plans be approved.
Mr. Purcell would be entitled to nearly $1 million in severance, the filing said. But the independent director has also considered that certain payments to Mr. Purcell made shortly before the bankruptcy might be recoverable under the bankruptcy code. However, the agreement largely bypasses that question because all of the parties are waiving most of their claims, allowing the remaining proceeds of the newspaper’s sale to be distributed to employees, pension plans and other creditors.
The proposed settlement said Mr. Purcell isn’t waiving any future payment he might receive as a director of the reorganized business.
William Kannel, a Mintz Levin Cohn Ferris Glovsky & Popeo PC lawyer representing Mr. Purcell, couldn’t be reached for immediate comment Friday.
The Boston Herald’s former owner, Herald Media Holdings Inc., sought chapter 11 protection in December 2017, seeking to reorganize.
A few months later, in a court-approved sale, virtually all of its assets were soldto MediaNews Group Inc. in a deal that included a $9.6 million cash payment and $1 million to be paid to employees for accrued paid time off.
In July 2018, the bankruptcy court confirmed the Herald’s debt-cutting plan. On Aug. 1, it took effect. The newspaper continues to publish.
HMH Media plans to ask the court on Sept. 16 to approve the agreement with the pension funds and Mr. Purcell.
Write to Becky Yerak at becky.yerak@wsj.com
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