FATEFUL WEEK FOR DISPATCH
The news of the Alaska Dispatch News filing for bankruptcy while being sold to a group of longtime Alaskans was well-received by Must Read Alaska readers on Sunday morning. Several sent personal notes saying they plan to subscribe to the newspaper once again.
But the deal is not quite done. Alice Rogoff still owns the paper, although she has turned over management entirely to the group formed by the Binkley family and Jason Evans, according to those close to the businesses.
There are several moving parts to a process that will depend on good faith, skilled lawyering, and some amount of luck. It appears the new owners have that, plus longtime relationships in Alaska that will help them. What is unknown is whether the ever-litigious Rogoff will follow through or continue changing directions.
The Binkley-Evans group has been in discussion with Rogoff for several weeks, but they were not the only ones. Morris Communications was also looking at a possible purchase of the Dispatch. Press experts were flown in to examine the mess that Rogoff had, with two of her presses located in an inadequate building on 59th and Arctic, and a old-but-functioning press taking up room in a building now owned by GCI.
The Morris experts said the mess was too great to untangle without massive investment. It would cost at least $1.5 million to move the press from the GCI building, and the other presses were not ready to roll. Morris backed out. A short time later, the Morris’ sold almost all of their newspapers, including three in Alaska.
But the Binkleys soldiered on, with Jason Evans as a partner, in pressing Rogoff to sell the quickly failing newspaper.
ART OF THE DEAL
The Binkley-Evans partnership brings together two families with roots that go deep in Alaska. Evans is Inupiaq, born and raised in Nome. The Binkleys are Fairbanks blue blood.
In 2011, Jason Evans and his wife Kiana Peacock purchased the Arctic Sounder, The Dutch Harbor Fisherman and The Bristol Bay Times, which was combined with the Fisherman. The couple purchased the newspapers from Alaska Newspapers Inc, which was owned, operated and eventually liquidated by the Calista Corporation.
The five-generation Binkley family has been running riverboats in Alaska for five generations — over 100 years. In 1898, Charles M. Binkley hiked over the Chilkoot Pass with other stampeders, not in search of gold, but to build and operate boats on the Yukon and other Interior rivers. He became a respected pilot and boat builder in the North. His son, Captain Jim Binkley, Sr., followed in his father’s footsteps and piloted freight vessels on the Yukon and Tanana Rivers in the 1940s. The grandchildren and great grandchildren run the operations today, including the Riverboat Discovery, a 900-passenger tour vessel.
John Binkley, in his early 60s, wanted to buy the Fairbanks News-Miner when it came up for sale in 2015. But Media News Group, the Denver company that owned the paper, sold it to a foundation established by the former owners of the News-Miner.
In the purchase of the Alaska Dispatch News, it’s Ryan Binkley and his siblings, Wade Binkley, James Binkley, and Kai Binkley Sims, and the Alaska Media LLC who make up the new proposed owners.
The group has evidently agreed to the purchase of just the assets of the Dispatch, and they are today filing more documents relating to that purchase with bankruptcy court.
A judge must agree to the conditions.
In consideration, the Binkley family is loaning the company $1 million to keep the company operating until the bankruptcy reorganization can work its way to completion — which could be done within 30-45 days, if the courts agree to expedite it.
THREE COMPONENT PARTS
The deal has three major elements, and while Must Read Alaska doesn’t pretend to fully understand the technical nuances of bankruptcy law, those components seem to be the asset purchase agreement, a “debtor in possession” filing, and a Section 363.
The asset purchase agreement is what Rogoff is believed to have signed with the Binkley-Evans group.
Debtor in possession means Rogoff still owns the company, even though she filed for Chapter 11 bankruptcy protection. In this case, she appears to have given over control of all operations to Binkley-Evans, although the debts she owes are hers alone. A judge will have to approve that arrangement, and a court date is likely this week. A debtor in possession filing would be required to complete that temporary arrangement.
Section 363 of the U.S. Bankruptcy Code happens when a business is a distressed asset and has inadequate capital to continue operations. The potential purchaser, in this case the Binkley-Evans group, are willing to provide short-term financing to keep the business alive. The purchaser says it will pay for the assets if they come free and clear of any liens and debts, and this is a method that is part of a quick transaction that keeps the business from going under.
In the case of the Dispatch, the sale agreement can’t be concluded until the bankruptcy process is completed, but the Section 363 is a “stalking horse” position that gives the Binkley-Evans group an advantage for when the business comes out of bankrutpcy and is essentially put up for auction.
At that point, other entities can also bid on it, so it’s no sure deal that the Binkley-Evans ownership will proceed. They are simply in the best position to buy the newspaper now. As part of the DIP filing, the Binkleys have priority for getting their money back.
At this point, all major decisions will need to be approved by the court. Rogoff will next be required to file a complete list of her creditors, and indicate to the court which are secured creditors and which are unsecured.
Where that leaves her other creditors is uncertain. Some of them may get stiffed in Rogoff’s reorganization:
Tony Hopfinger, her former business partner who left in disgust or was fired by Rogoff (they have different sides to that story), has a contract written on a bar napkin: She owes him $900,000.
Northrim Bank has loaned her subtantial amounts of money and, among the pre-existing creditors, appears to be in first position to collect. Numerous contractors, landlords and others are owed what appears to be millions of dollars.
In the meantime, the talk in Must Read Alaska’s circles is that finally, for the first time in a quarter century, Anchorage may get a daily newspaper that doesn’t slant hard to the left.