United Press International reported Monday that Reuters, the British wire service, is expected to make an offer later this week to buy the beleaguered news agency, which is now trying to operate and reorganize itself under the protection of U.S. bankruptcy laws.
In a report carried over the UPI wire, UPI President Ray Wechsler was quoted as saying that the company is talking with several potential bidders about buying UPI, and unnamed sources were quoted as saying that Reuters is meeting with UPI management Wednesday to make an offer.
The story is the latest in a series of rapid, often contradictory developments surrounding the struggling news agency. Two different management groups are claiming control of UPI, and both are trying to sell it. At the same time, various creditors are vying for priority in a Washington bankruptcy court in an effort to recover debts of at least $36 million.
Any plan to sell UPI requires the approval Judge George Bason, the federal bankruptcy judge who has had technical control of the news agency since it filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code two weeks ago.
Weighed Offer 3 Years Ago
Reuters officials failed to return phone calls Monday inquiring about the UPI report.
Reuters considered buying UPI three years ago and declined, Reuters officials said in interviews last fall, because they were uninterested in the expensive-to-produce, detailed report that UPI offers from all 50 states, including the collection of local sports, weather and other information. One Reuters executive called UPI’s 50-state report “the fender bender” level of reporting.
UPI sources have said that Reuters’ earlier decision not to buy UPI raises questions about which UPI operations Reuters would continue were it to buy UPI now.
In June, 1984, Reuters bought UPI’s overseas picture service for $5 million, including the right to sell UPI’s U.S. photos overseas, and it is widely believed that Reuters is interested in having its own American photo service should UPI disappear.
UPI sources have told The Times that Reuters officials also have been meeting with the rival management faction at UPI--Nashville, Tenn., businessmen Douglas Ruhe and William Geissler--who have claimed that they are the owners of the news agency and are trying to win management control in bankruptcy court.
Order Didn’t Affect UPI
Last week, they won a largely symbolic court victory in Delaware, getting an order temporarily restraining UPI Chairman Luis Nogales from managing UPI’s parent company, Media News Corp. Media News has no other assets than UPI, but the order did not affect UPI itself.
Actually, control of UPI rests with Judge Bason, who has the power of tossing out both management teams and assigning an outside trustee.
Meanwhile, Bason on Monday approved a plan by which more than 1,000 UPI employees would continue to receive medical benefits during the company’s reorganization. The plan was a $190,000 settlement with Prudential Insurance Co. of America.
An attorney for the Internal Revenue Service, which is owed $1.8 million in back taxes by UPI, objected to the freeing of the money, but Bason ruled that the settlement was necessary for UPI’s continued operation.