Investors Group Offers $17 Million for UPI
An unidentified investors group that includes “several prominent individuals from the world of news and finance” Monday offered to buy United Press International by paying off up to $17 million of the wire service’s debts and providing it with enough money to keep operating for at least a year.
UPI, which has been operating under the protection of a federal bankruptcy court since late April, was asked to present the offer to its committee of creditors and respond within two weeks.
The news agency has sought an investor or possible buyer for several months without apparent success, and although it said that it has had talks with half a dozen groups in the last six weeks, Monday’s bid is apparently the firmest that it has received to date.
“We think it is very unlikely that a more generous offer will be forthcoming,” said David Rubenstein, an attorney who presented the offer to UPI management Monday along with his colleague, Richard Beatty.
Fewer Than Six People
Rubenstein, who said he had been working on trying to find investors for UPI for two years, was deputy domestic policy adviser to former President Jimmy Carter.
UPI Chairman Luis Nogales said only that he could confirm that the offer was received and that the investors are “very credible.”
Rubenstein said the group includes fewer than six people, some of them Washingtonians, who “have had prominent careers in the news-publishing business and the financial world. Their names would mean a lot. They are people who bring the credibility of sound financial management and good journalism.”
A source involved in the offer also said the group wanted to remain anonymous until it hears a response from UPI’s creditors committee and management, in part to avoid being besieged with phone calls from the media and in part to avoid problems in case the offer is rejected.
The investors group also may still try to enlist an additional investor or two, the source said.
‘Tradition of Independence’
Rubenstein said the group was motivated to make the offer in part by a desire to maintain competition in the wire service field.
“We are committed to preserving UPI’s tradition of independence, professionalism and excellence,” he said.
According to the terms of the offer as outlined by Rubenstein, the group would pay:
- $1.5 million in administrative expenses, attorneys fees and banking fees involved with the bankruptcy proceedings.
- Roughly $3.3 million in unpaid federal and state taxes. That figure does not include penalties that UPI owes various tax agencies.
- Whatever is “required by law” to UPI’s secured creditors, an amount between $4 million and $8 million.
- Roughly $5.1 million to the hundreds of unsecured creditors owed roughly $28 million, about 18 cents on the dollar.
In addition, Rubenstein said the unnamed investors would provide “sufficient working capital to operate UPI on a truly competitive basis with other major news organizations” for at least one year.
