The publisher of the Baltimore Jewish Times, embroiled in a bitter Chapter 11 bankruptcy case, has filed a new plan that would shift most of the ownership to a new group of investors led by businessman Dr. Scott Rifkin.
The proposed reorganization is the latest effort of Alter Communications Inc. to exit bankruptcy. The court had ordered Alter and H.G. Roebuck & Son Inc., its creditor, to come up with a joint plan by year’s end. Alter’s plan, submitted to the U.S. Bankruptcy Court on Friday, was not a joint plan. Roebuck, the longtime former printer of the paper whose lawsuit against Alter prompted the bankruptcy filing, did not approve of the plan and on Monday called for a trustee to be appointed.
Rifkin, founder of senior center and long-term care facility manager Mid-Atlantic Health Care LLC, and the rest of the unnamed investors would get an 80 percent stake in Alter under the plan in exchange for a capital infusion of $600,000.
Current Jewish Times Publisher Andrew A. Buerger’s employment contract would be rejected under the deal, but he would stay on in his current position as an at-will employee. Co-publisher Ronnie L. Buerger and other members of the Buerger family, which founded the paper, would hold a 20 percent stake in the new company.
“The Jewish Times is a venerable source of information for Baltimore’s Jewish community,” Rifkin said. “And the investor group felt it would be a shame if it didn’t continue for another 50 or 100 years.”
Roebuck’s lawyer, William L. Hallam, with Rosenberg | Martin | Greenberg LLP in Baltimore, said the company was calling on the court not to move forward on the plan and instead appoint an independent trustee to review the options. Hallam said in his filing that Alter engaged in only “superficial” discussions with Roebuck about the plan in an effort to paint the printer as not participating in good faith. According to the filing, Alter refused to entertain any discussions with anyone that did not back a plan where the Buerger family retained a 20 percent stake in the reorganized company.
“We had been hoping something would be proposed that would be jointly acceptable,” Hallam said. “We were hoping there would be a plan that would be good for everyone.”
Roebuck also questioned why, if the investor group was pumping $600,000 into the company, then the amount being paid to unsecured creditors was less in this plan than in previous ones that did not have that kind of capital infusion.
“In a plan where more money goes in and yet there’s less money being paid out — you have to wonder,” Hallam said.
However, Hallam said Roebuck was not calling for the Buergers to not have a place in the reorganized company. He said an earlier proposal by them called for Andrew Buerger’s employment contract to be renewed.
“We’re not opposed to the Buergers owning stock, we’re opposed to them owning stock without paying for it,” Hallam said
Alter attorney Maria Ellena Chavez-Ruark, with Tydings & Rosenberg LLP in Baltimore, said that the Buerger family was giving up a lot in the deal, including moving some of the debt they are owed from secured to unsecured status. Under the plan, Andrew Buerger would also relinquish any claims he might have had with the termination of his employment contract.
Chavez-Ruark said that Alter and the investor group had tried to come to an agreement with Roebuck but were unsuccessful. She denied the implication that the investor group and Alter had not been working for months to hammer out a mutually agreeable plan.
“Discussions have been ongoing for months, and the investor group was actively involved for months,” Chavez-Ruark said. “And, the suggestion by Roebuck that there were not good faith settlements going on or that there was nothing going on is patently false.”
H.G. Roebuck sued Alter and Andrew Buerger for breach of contract in 2009 and won a $362,000 judgment. This led to Alter filing for bankruptcy protection, and Roebuck’s owners challenging the initial plan, which would have given them 85 percent of Alter’s profits over a five-year period. Roebuck’s competing plan would have split Alter’s stock evenly with the Buerger family.
In addition to the Jewish Times, Alter publishes Style magazine, Chesapeake Life magazine and a portfolio of custom publications. The Jewish Times, Maryland’s largest Jewish weekly publication, publishes on Fridays, averages more than 120 pages and has a paid circulation of nearly 50,000, according to its website.
The paper was founded in 1919 by David Alter, and Andrew Buerger took over the company when his father, Charles A. Buerger, died in 1996. Andrew Buerger changed the company name from Jewish Times Inc. to Alter Communications.