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Bankruptcy judge appoints trustee for Jewish Times

After nixing a last-minute, hurried sale and acknowledging there appeared little hope of a mutually-agreed upon plan, a federal judge on Friday appointed a trustee to run Alter Communications Inc., publisher of the Baltimore Jewish Times.

U.S. Bankruptcy Court Judge Nancy V. Alquist ordered the appointment of a trustee after hearing arguments from Alter that it would likely not have enough money to make it through next week’s expenses: paying employees, the printer and the U.S. Postal Service to deliver the weekly publication.

Attorneys for Alter, which is in Chapter 11 bankruptcy, presented an alternative under which Rockville-based WJW Group LLC, publisher of the Washington Jewish Week, would buy all the assets of Alter for roughly $400,000.

That deal would have been enough to pay Alter’s largest creditor, Wells Fargo Bank, and would have allowed the Buerger family, which founded the paper, to maintain some ownership in the new company.

Alquist turned down the deal, which would have had to close by Wednesday, as too rushed, lacking in details and prone to possibly falling apart considering the track record of failed plans and deals to bring the company out of bankruptcy over the last few years.

Alquist referred the matter to the U.S. Trustee’s Office to appoint the trustee.

The bankruptcy was triggered after the company’s former printer, H.G. Roebuck & Son Inc., sued Alter and Andrew Alter Buerger for breach of contract in 2009 and won a $362,000 judgment.

In addition to the Jewish Times, or JT Magazine, Alter also 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. 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.

Going into Friday, Roebuck and Alter both had to scuttle earlier plans and did not have new ones to replace them.

Alquist had set a deadline of 9:30 Friday morning for new plans. Since neither side met the deadline, the hearing on a motion to appoint a trustee went forward as scheduled Friday afternoon.

At the hearing, attorneys said Roebuck’s deal fell through when its partner, the Washington Jewish Week, pulled out after poring over Alter’s books for six hours on March 11; while Alter’s plan, which included $600,000 in funding from a new group of investors led by businessman Dr. Scott Rifkin, fell apart due to infighting amongst family members and the company’s board of directors.

Roebuck attorney William L. Hallam, with Rosenberg|Martin|Greenberg LLP in Baltimore, argued that without a viable plan in place it was in the best interest of creditors for a trustee to be named.

Hallam pointed out that in addition to not being able to pull a deal together, Alter lost more than $400,000 in December and January despite a pledge last year to remain profitable.

“The numbers are very bad here,” Hallam said.

Shutdown feared

David S. Musgrave, an attorney with Ober|Kaler who represented Alter majority shareholder Ronnie Buerger, argued against appointing a trustee. Instead, he asked the court to allow Alter to sell its assets to Washington Jewish Week by Wednesday, which would allow for employees to be paid and the publication to get printed and shipped to subscribers.

“The issue is whether or not Alter will be able to publish JT Magazine next week,” Musgrave said. “If it does not then for all intents and purposes, the company is dead.”

Musgrave said that without a deal in place, the employees would not show up and there was a likelihood the paper wouldn’t publish — and that could spell the end of the Baltimore Jewish Times after 93 years of not missing an issue.

“We just don’t want this company to shut down,” Musgrave said. “The trustee would not be selling the company as a going concern. They’d be collecting receipts and selling equipment.”

In his closing argument, Hallam said that after two years of litigation, the deal the company was proposing was not far from its initial proposal that would include Buerger family members as owners.

“The only way to find out what’s out there is to have a disinterested party make that decision,” Hallam said.

In her ruling to appoint a trustee, Alquist said she was skeptical of Alter’s proposed deal and pointed out that infighting among company principals had already killed one deal and leaving a disinterested third party trustee out of the negotiations might kill any further deals.

“These parties have had numerous opportunities to make a deal before it was hanging by the thread it’s hanging by now,” Alquist said. “Its own plans have been bollocksed by them.”

Alquist added also that trying to hammer out a deal, have it in place on Monday, solicit for higher offers and then close on Wednesday was untenable.

“It doesn’t even have a whiff of due process,” she said.

After the ruling came down about 5 p.m. on Friday, Alter Communications CEO Andrew Buerger said that even with the uncertainty over the company’s future he hoped to be able to put out next week’s issue and hopefully find a resolution that will keep Alter in business.

“Our job is to keep it operating until we can find a buyer,” Buerger said. “I’ve told everyone that I will see them at 9 a.m. on Monday.”

Neil Rubin, editor of the Baltimore Jewish Times, who attended the hearing, said he had no plans to do anything differently and planned to move forward with putting out next week’s issue.

“I’ll definitely be there first thing on Monday,” he said.