Next Week in Bankruptcy

On Monday in Santa Ana, Calif., the publisher of the Orange County Register will ask a bankruptcy judge to approve its sale to Tribune Publishing Co. for $56 million in cash.

Tribune has been a mainstay in Freedom Communications Inc.’s bankruptcy from the early days of the proceeding, but a new civil antitrust lawsuit from the Justice Department could block the sale.

At a recent auction, Tribune beat out a lead bid from Digital First Media and another offer from an investor group composed of Freedom Chief Executive Richard Mirman and developer Mike Harrah.

But the Justice Department has argued that the deal could violate antitrust laws. If combined, the merged operation would account for 98% of newspaper sales in Orange County and 81% of English-language newspaper sales in Riverside County. The deal would allow the Tribune to increase subscription prices, raise advertising rates and invest less to maintain the quality of its newspapers, the agency said.

Tribune called the lawsuit “misguided” and said there is no evidence that advertisers would be hurt by the combination.

Freedom filed for chapter 11 protection in November, its second trip through bankruptcy. The first, in 2009, ushered Freedom into the hands of several hedge funds, which in turn began selling off some of its newspapers and its TV stations.

On Friday in Denver, Midway Gold Corp. will also ask a judge for permission to send its assets to the auction block.

The Englewood, Colo., gold mining firm says a number of potential bidders are already kicking its tires ahead of the auction, which it wants to hold next month.

The company has proposed an April 1 bid deadline, an April 5 auction and an April 12 hearing for a judge to consider approving the winning bid, all in line with an April 15 deadline to close a sale imposed by its lenders.

The assets available include its only gold-producing property at the north end of Nevada’s Pancake mountain range. But Midway is also seeking to sell a sister mine, which isn’t producing gold but is expected to in the near term, the company said. The other properties up for sale are in various stages of exploration.

In December, Midway closed the sale of its 30% stake in a Nevada mining project to a unit of Waterton Global Resource Management Inc. for $25 million. Waterton also separately acquired fellow miner Barrick Gold Corp.'s 70% stake in the project for $110 million.

Primorsk International Shipping on Tuesday will return to the Manhattan bankruptcy court to update a judge on a budding legal battle with its senior lenders.

Earlier this month, Judge Martin Glenn chided both sides for “not playing well in the sandbox” and encouraged both sides to find a way to resolve their difference consensually.

Nordea Bank Norge ASA, which leads a group of senior lenders owed about $263 million, has said the proposed reorganization plan will benefit only the company’s insiders and their affiliates.

Court papers filed Tuesday show the company’s proposed plan would set aside 25% of the reorganized company for Dmitry Golomovzy and Alexander Kirilichev, Primorsk’s owners and senior executives. Because the two also own about a third of Primorsk’s outstanding bonds, they would end up with 49% of the reorganized company, court papers say.

Nordea has instead demanded that Primorsk abandon the plan and begin selling off its fleet of vessels to pay off its debt.

Primorsk has been at odds with senior lenders over its proposed reorganization since it filed for chapter 11 protection earlier this year.  Both sides say they remain open to a negotiated solution.

Primorsk, which is maintaining its operations while in bankruptcy, owns nine double-hulled ships—operating in Russian, Canadian, U.S. and European waters—that are capable of transporting crude oil in extreme Arctic conditions.

-Anne Steele contributed to this article.

 Write to Tom Corrigan at [email protected]