Court OKs former Sun-Times Media Group's modified liquidation plan

By Jim Witters

Wilmington, Del., Aug. 17 - Chicago Newspaper Liquidation Corp.'s first modified plan of liquidation received court confirmation during a brief hearing Wednesday in the U.S. Bankruptcy Court for the District of Delaware.

Judge Peter J. Walsh signed the confirmation order for the former Sun-Times Media Group Inc. following the hearing. Michael Katzenstein was appointed liquidating trustee. Activation of the liquidation trust is to occur on the plan's effective date.

Under the terms of the liquidation plan:

• Administrative claims and non-priority tax claims will be paid in full in cash;

• Holders of secured claims will receive the collateral securing the claim;

• Priority tax claims will receive a pro rata share of the liquidating trust's interests on the effective date or as soon as possible thereafter. The U.S. Internal Revenue Service and the New York State Department of Taxation and Finance together hold $234.7 million of tax priority claims.

• Holders of general unsecured claims and holders of Section 510(b) claims will receive no distribution;

• Holders of CNLC interests, inter-company claims and inter-company interests will receive no distribution. On the plan's effective date, all such claims and interests will be deemed canceled and discharged.

In October 2009, Sun-Times Media Group Inc. sold substantially all its assets to Sun-Times Media Holdings LLC for $26.5 million. The assets included the Chicago Sun-Times, seven suburban daily newspapers and 51 weekly newspapers.

Sun-Times Media is a Chicago newspaper company that filed for bankruptcy on March 31, 2009. Its Chapter 11 case number is 09-11092.

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