11.09.2009 03:05 PM
Execs at Bankrupt Freedom Take $3.7 Million in Bonuses
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
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