IRVINE, CALIF.: Executives at bankrupt Freedom Communications took $3.7 million as the company spun toward bankruptcy, according to the AZ Capital Times. A total of 49 executives at the company were awarded bonuses, including Freedom CEO Scott Flanders, who received payments totaling $1.1 million, including one for $400,000 two weeks before the company filed for Chapter 11 in early September. Executives that oversaw Phoenix’s East Valley Tribune were awarded even as the 118-year-old newspaper was slated for the scrap pile at the end of this year.
Freedom Communications filed for Chapter 11 Sept. 1 with a plan for lenders to take over the company. The U.S. Bankruptcy Court for the District of Delaware in Wilmington approved the plan for J.P. Morgan Chase, SunTrust and Union Bank of California to take over the company. All three collectively held around $770 million of Freedom’s $1 billion debt.
Freedom’s unsecured creditors filed an objection last month with the court, claiming the company’s investment banker had a conflict of interest. The same group opposed a proposal to award the executives another $7 million in bonuses while they were allotted only $5 million for their investments.
Freedom has 100 newspapers and eight TV stations. Executives from all eight TV operations were listed among those who received bonuses at AZCapitalTimes.com.
More on Freedom:
November 2, 2009: “Freedom Files Reorganization Plan”
Freedom’s secured lenders will take over the company under a debtor-in-possession agreement reached before the filing.
October 12, 2009: “Freedom Communications Creditors Lash Out”
Unsecured creditors for bankrupt Freedom Communications are raising objections with the Chapter 11 proceeding.
September 2, 2009: “Freedom Files for Chapter 11”
Under deal terms, lenders will take over the company, which includes eight TV stations and around 100 newspapers.
August 31, 2009: “Freedom Communications Expected to File Chapter 11”
Freedom defaulted last fall, but reached agreements in April with senior credit facility lenders to waive certain requirements through the end of the year.
