Judge Hits Pause on 'Boston Globe' Sale

A 4-year-old legal dispute between a mid-sized Massachusetts newspaper and its delivery personnel is delaying the New York Times Co.’s planned sale of The Boston Globe and related New England media assets, according to the Globe, which first reported the news.
 
Judge Shannon Frison of the Superior Court in Worcester, MA has issued a temporary restraining order halting Red Sox owner John W. Henry’s acquisition of The Boston Globe and Worcester Telegram & Gazette from NYTCO after current and former newspaper carriers for the Telegram & Gazette filed a legal petition saying it jeopardized their chances of collecting a settlement resulting from a class-action lawsuit against the paper.
 
The newspaper carriers filed a lawsuit in 2009 arguing that the Worcester Telegram & Gazette broke Massachusetts state law by classifying them as independent contractors, allowing it to avoid providing certain benefits. A local and state appeals court have found in favor of the newspaper carriers, but the case is ongoing and any settlement will rely partly on the value of the Worcester Telegram & Gazette.
 
The planned sale of the Worcester Telegram & Gazette, along with other assets in NYTCO’s New England Media Group, would serve to fix the value of the newspaper for legal purposes. Because The Telegram & Gazette is being sold in a package deal with The Boston Globe -- a much larger newspaper, which is also considered a “distressed property” -- the low valuation attached to the latter could effectively wipe out the value of the former.
 
In addition to temporarily halting the sale, Judge Frison has subpoenaed financial documents from NYTCO, The Boston Globe and the Telegram & Gazette, as well as John W. Henry, in order to determine a fair market value for the newspaper separate from the other parts of the New England Media Group.
 
On Monday, NYTCO offered to set aside a sum of money, to be determined by Frison, to pay any compensation ordered in the newspaper carriers’ class-action lawsuit, in order for the planned sale to go forward. However, the company has stated it is not willing to assume all potential liability stemming from the lawsuit.
Tags: legal, m&a, newspapers
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