• by Erik Sass  @eriksass1, September 9, 2009

Unfazed by the well-publicized woes of the newspaper business, James C. Tyree -- a Chicago businessman and the chairman and CEO of Mesirow Financial -- has assembled a group of investors to bid $5 million for the Sun-Times Media Group, the publisher of the Chicago Sun-Times. If successful, they would also become owners of 58 smaller community newspapers published by the group.

Tyree's bid, according to a report in the Sun-Times, was made in the context of bankruptcy proceedings initiated by the Sun-Times Media Group in March of this year.

As part of the deal, Tyree would probably assume various liabilities amounting to $20 million, but avoid the biggest blot on the Sun-Times' balance sheet: $600 million in unpaid taxes dating back to the felonious tenure of Conrad Black -- formerly the chairman and COO of Hollinger International, now serving the second year of a 6.5-year jail sentence for mail fraud and obstruction of justice.

Although the Sun-Times Media Group has asked the U.S. bankruptcy court in Delaware to expedite the sale, the bid from Tyree's investor group is not guaranteed to win. Legally, the bankruptcy court judge may initiate an auction if other bids emerge, with the goal of obtaining the maximum possible remuneration for creditors.

However, the newspaper business in general has seen interest in mergers and acquisitions slide from lukewarm to ice-cold over the last couple of years, as potential buyers have been spooked by the steep decline in ad revenues. In response, lenders have closed their pocketbooks amid a prolonged credit crunch.