NEW YORK -- Middle East Broadcasting Centre Ltd. Tuesday submitted the winning bid of $3.95 million in cash for United Press International, ending a three-way battle in bankruptcy court for the 85- year-old wire service.
The winning bidders said they are prepared to spend additional millions of dollars to rebuild UPI, continue its operations as a worldwide news service and return it to profitability.
Dennis O'Dea, a lawyer for the creditors committee, told U.S. Bankruptcy Judge Francis Conrad that UPI and the creditors had concluded that London-based Middle East Broadcasting's bid was 'the highest and best offer.'
'This court accepts the bid of -- what is it? -- Middle East Broadcasting Centre,' Conrad said, after hearing a series of escalating offers for the Washington-based news agency from three contenders in U. S. Bankruptcy Court in Manhattan.
The wire service and its creditors rejected New York attorney Leon Charney's bid of $3.75 million in cash plus an equity interest of 10 percent in a reorganized UPI and a $900,000 bid for the UPI name and several assets from religious broadcaster Pat Robertson.
The acceptance of Middle East Broadcasting's bid ended a turbulent period for UPI, which has been operating under Chapter 11 bankruptcy protection since Aug. 28, 1991, and faced a possible shutdown June 12 after Robertson withdrew an initial $6 million offer.
O'Dea said Middle East Broadcasting will close the deal to buy UPI Saturday. Middle East Broadcasting was founded in 1989. It transmits English and Arabic-language news and entertainment to the Mideast, North Africa and Europe.
UPI said it has enough money to meet its payroll through Saturday, which it chose as the closing date for accounting purposes. Middle East Broadcasting will put up $200,000 Wednesday and deliver a letter of credit for the remaining $3.93 million by Thursday.
Middle East Broadcasting, privately owned by Saudi Arabian investors, will accept financial reponsibility for UPI's outstanding contracts for 30 days while it determines which ones it will assume, O'Dea said.
Charney put up $180,000 to keep UPI operating while he reviewed the wire service's books during a 10-day period that ended Monday at midnight.
He said he will appeal Conrad's decision to accept the Middle East Broadcasting bid.
Charney, who produces and moderates a show on Middle Eastern affairs for public television in New York, said the creditors committee violated an agreement he had with UPI by talking to Middle East Broadcasting during his 10-day review period.
Middle East Broadcasting contacted UPI lawyers last week about making a bid but was prevented from talking to UPI directly under a so-called standstill agreement with Charney while he examined the books.
Conrad said he disagreed with Charney, pointing out that neither the bankruptcy court nor the creditors had signed the standstill agreement.
'In this economy we need to keep as many reporters alive and eating as we can,' Conrad said.
O'Dea said the creditors reviewed the bids from both Charney and Middle East Broadcasting before reaching their decision.
He said Charney's offer would be held as a secondary bid in the unlikely event the Middle East Broadcasting bid turned sour.
As part of its offer, Middle East Broadcasting said it is prepared to invest between $10 million and $12 million to rebuild UPI and make it profitable.
When the wire service filed for bankruptcy protection in August, it listed liabilities of some $60 million and assets of around $22 million.
Sandra Reimer, an attorney for Middle East Broadcasting, said representatives of the company would fly to the United States from London to meet with UPI management.
'This is a worldwide organization,' she said, referring to UPI. 'They don't want to walk in and just change things too quickly.'
Reimer said Middle East Broadcasting executives want a 'smooth transition' with the takeover of UPI.
UPI Executive Editor Steve Geimann said, 'I look forward to working with representatives for the Middle East Broadcasting Centre and sharing with them my ideas for UPI's future and hearing about their ideas for our future.'
Geimann added, 'I'm relieved that the uncertainty we've all lived with for the past several months is now behind us and we can look forweard to a more certain future with an ownership with the resources to keep us in business.'
Kevin Keane, president of the Wire Service Guild, which represents some of UPI's domestic employees, said, 'The new ownership has indicated a willingness to meet with us and discuss a new contract and terms.'
The labor contract negotiated by the existing UPI management has an expiration date of June 30 and covers about 400 employees in the United States. UPI staffers in overseas bureaus are not covered by the contract.
'UPI employees who have sacrified so much are entitled to a good deal,' Keane said, referring to a series of wage cuts the Guild-covered employees voted to accept over the past 17 months to help keep the company alive while it looked for a buyer. UPI management employees took the same wage cuts.
As the bidders upped the ante for UPI earlier in the day, Conrad said his primary concern was the UPI employees. 'They must be living in Dante's hell,' the judge said, referring to the months of uncertainty.
During the hearing, Middle East Broadcasting raised its all-cash bid for UPI to $3.95 million from $3.5 million in several steps after Charney increased his offer to $3.9 million from $3.6 million.
Charney then revised his bid to $3.75 million in cash plus a 10 percent equity stake for creditors that he said would pay them $1 million over five years. He also asked the judge to give him another 24 hours to consult with his partners and said the $3.75 million bid, plus the equity interest, was his final offer.
Lawyers for Robertson argued that his $900,000 offer for the UPI name was the only active bid because he was backing it up with a certified check for $900,000.
Charney told reporters during a break in the hearing that it would be best if UPI remained in American hands and said the news media in the Middle East, including Israel, is subject to censorship.
Charney said he was concerned with 'keeping the American sense of fair play, justice and due process.'
But Reimer, who represents Middle East Broadcasting, said 'one of the things of great value to our client is UPI's reputation.'
She said Middle East Broadcasting offers its services as an alternative to government-controlled news in the Arab world.
'Clearly it's not in their interest to damage that reputation,' Reimer said, referring to UPI's good name.
Michael Costello, a Washington-based consultant for Middle East Broadcasting, said the company intends to keep UPI intact.
MBC's priorities are to modernize UPI's telecommunications, beef up its broadcast operations, maintain the existing client base and support general news on a worldwide basis, including the news agency's domestic service, Costello said.
When Robertson dropped his $6 million offer for all of the wire service two weeks ago, he resubmitted a pared-down bid of $500,000 for the UPI name, its picture archives and a contract for overseas photos. That offer was rejected by Conrad, UPI management and the creditors committee.
After Robertson abandoned his $6 million bid, which had been entered at a bankruptcy auction in Vermont last month, UPI was faced with closing its doors two days later on June 12 without another buyer in the wings.
Charney then put up $180,000 to keep UPI operating while he examined its books before deciding whether to make an offer. Middle East Broadcasting surfaced last Thursday with its plan to make a bid.
UPI, which has been a subsidiary of Infotechnology Inc., was founded by E.W. Scripps on June 21, 1907 and sent its first news report on July 15, 1907. A winner of nine Pulitzer prizes, UPI was sold by Scripps Howard in 1982 and had three owners before Middle East Broadcasting won the bidding Tuesday.
Dennis O'Dea, a lawyer for the creditors committee, told U.S. Bankruptcy Judge Francis Conrad that UPI and the creditors concluded Middle East Broadcasting's bid was 'the highest and best offer.'
'This court accepts the bid of -- what is it? -- Middle East Broadcasting Centre,' Conrad said.
The wire service and its creditors chose the Middle East Broadcasting bid over New York attorney Leon Charney's offer of $3.75 million in cash plus an equity interest of 10 percent in a reorganized UPI and over a $900,000 bid for the UPI name and several assets from religious broadcaster Pat Robertson.
O'Dea said Middle East Broadcasting, which transmits English and Arabic-language news and entertainment to the Mideast, North Africa and Europe, will close the UPI deal Saturday.
Middle East Broadcasting, privately owned by SaudiArabian investors, will accept financial reponsibility for UPI's outstanding contracts for 30 days while it determines which ones it will assume, O'Dea said.NEWLN: more
Charney put up $180,000 to keep UPI operating while he reviewed the wire service's books during a 10-day period that ended Monday at midnight. He said he will appeal Conrad's decision to accept the Middle East Broadcasting bid.
Charney, who produces and moderates a show on Middle Eastern affairs for public television in New York, said he wanted to determine whether the creditors committee violated an agreement he had with UPI by talking to Middle East Broadcasting during his 10-day review period.
Middle East Broadcasting contacted UPI lawyers last week about making a bid but was prevented from talking to UPI directly under a so-called standstill agreement with Charney while he examined the books.
O'Dea said the creditors reviewed the bids from both Charney and Middle East Broadcasting before reaching their decision.
He said Charney's offer would be held as a secondary bid in the unlikely event the Middle East Broadcasting offer turned sour.
Middle East Broadcasting agreed to provide UPI with a letter of credit for the $3.95 million by Thursday, O'Dea said.
As part of its offer, Middle East Broadcasting said it was prepared to invest between $10 million and $12 million to rebuild UPI and make it profitable.
The wire service has been operating under Chapter 11 bankruptcy protection since Aug. 28, 1991. At that time, UPI listed liabilities of some $60 million and assets of around $22 million.
Sandra Reimer, an attorney for Middle East Broadcasting, said representatives of the company would fly to New York from London to meet with UPI management.
'This is a worldwide organization,' she said, referring to UPI. 'They don't want to walk in and just change things too quickly.'
Reimer said Middle East Broadcasting executives wanted a 'smooth transition' with the acquisition of UPI.NEWLN: more
UPI Executive Editor Steve Geimann said, 'I look forward to working with representatives for the Middle East Broadcasting Centre and sharing with them my ideas for UPI's future and hearing about their ideas for our future.'
Geimann added, 'I'm relieved that the uncertainty we've all lived with for the past several months is now behind us and we can look forward to a more certain future with an ownership with the resources to keep us in business.'
Kevin Keane, president of the Wire Service Guild, which represents UPI's domestic employees, said 'the new ownership has indicated a willingness to meet with us and discuss a new contract and terms.'
The current UPI labor contract expires June 30 and covers about 400 employees in the United States. UPI employees in overseas bureaus are not covered by the contract.
'UPI employees who have sacrified so much are entitled to a good deal,' Keane said.
As Conrad heard the escalating bids for UPI earlier in the day, he said his primary concern was the UPI employees. 'They must be living in Dante's hell,' the judge said.
During the day, Middle East Broadcasting raised its all-cash bid for UPI to $3.95 million from $3.5 million in several steps after Charney increased his offer to $3.9 million from $3.6 million.
Charney then revised his bid to $3.75 million in cash plus a 10 percent equity stake for creditors that he said would pay them $1 million over five years. He also asked the judge to give him another 24 hours to consult with his partners and said the $3.75 million bid, plus the equity interest, was his final offer.
Lawyers for Robertson, who withdrew a $6 million bid for all of the wire service two weeks ago, argued that his $900,000 offer for the UPI name was the only active bid because he was backing it up with a certified check for $900,000.
Charney told reporters during a break in the hearing that it would be best if UPI remained in American hands and said the news media in the Middle East, including Israel, is subject to censorship.
Charney said he was concerned with 'keeping the American sense of fair play, justice and due process.'
But Reimer, who represents Middle East Broadcasting, said 'one of the things of great value to our client is UPI's reputation.'
She said Middle East Broadcasting offers its services as an alternative to government-controlled news in the Arab world.
'Clearly it's not in their interests to damage that reputation,' Reimer said, referring to UPI's good name.
Michael Costello, a Washington-based consultant for Middle East Broadcasting, said the group intends to keep UPI intact.
MBC's priorities are to modernize UPI's telecommunications, beef up its broadcast operations, maintain the existing client base and support general news on a worldwide basis, including the news agency's domestic service, Costello said.
When Robertson withdrew his $6 million offer two weeks ago, he resubmitted a pared-down bid of $500,000 for the UPI name, its picture archives and a contract for overseas photos. That offer was rejected by Conrad, UPI management and the creditors committee. Robertson later raised his offer to $900,000.
After Robertson dropped his $6 million bid, UPI faced a possible shutdown June 12.
Charney then stepped in and put up $180,000 to keep UPI operating while he examined its books to determine whether to make an offer. Middle East Broadcasting surfaced with its plan to make a bid last Thursday.
UPI, a subsidiary of Infotechnology Inc., was founded by E.W. Scripps on June 21, 1907 and transmitted its first news report on July 15, 1907. A winner of nine Pulitzer prizes, UPI was sold by Scripps Howard in 1982 and had three owners before being acquired by Middle East Broadcasting.
Middle East Broadcasting Centre Ltd. Tuesday submitted the winning bid of $3.95 million in cash for United Press International, ending a three-way battle in bankruptcy court for the 85- year-old wire service.
The winning bidders said they are prepared to spend additional millions of dollars to rebuild UPI, continue its operations as a worldwide news service and return it to profitability.
Dennis O'Dea, a lawyer for the creditors committee, told U.S. Bankruptcy Judge Francis Conrad that UPI and the creditors had concluded that London-based Middle East Broadcasting's bid was 'the highest and best offer.'
'This court accepts the bid of -- what is it? -- Middle East Broadcasting Centre,' Conrad said, after hearing a series of escalating offers for the Washington-based news agency from three contenders in U. S. Bankruptcy Court in Manhattan.
The wire service and its creditors rejected New York attorney Leon Charney's bid of $3.75 million in cash plus an equity interest of 10 percent in a reorganized UPI and a $900,000 bid for the UPI name and several assets from religious broadcaster Pat Robertson.
The acceptance of Middle East Broadcasting's bid ended a turbulent period for UPI, which has been operating under Chapter 11 bankruptcy protection since Aug. 28, 1991, and faced a possible shutdown June 12 after Robertson withdrew an initial $6 million offer.
O'Dea said Middle East Broadcasting will close the deal to buy UPI Saturday. Middle East Broadcasting was founded in 1989. It transmits English and Arabic-language news and entertainment to the Mideast, North Africa and Europe.
UPI said it has enough money to meet its payroll through Saturday, which it chose as the closing date for accounting purposes. Middle East Broadcasting will put up $200,000 Wednesday and deliver a letter of credit for the remaining $3.93 million by Thursday.
Middle East Broadcasting, privately owned by Saudi Arabian investors, will accept financial reponsibility for UPI's outstanding contracts for 30 days while it determines which ones it will assume, O'Dea said.
Charney put up $180,000 to keep UPI operating while he reviewed the wire service's books during a 10-day period that ended Monday at midnight.
He said he will appeal Conrad's decision to accept the Middle East Broadcasting bid.
Charney, who produces and moderates a show on Middle Eastern affairs for public television in New York, said the creditors committee violated an agreement he had with UPI by talking to Middle East Broadcasting during his 10-day review period.
Middle East Broadcasting contacted UPI lawyers last week about making a bid but was prevented from talking to UPI directly under a so-called standstill agreement with Charney while he examined the books.
Conrad said he disagreed with Charney, pointing out that neither the bankruptcy court nor the creditors had signed the standstill agreement.
'In this economy we need to keep as many reporters alive and eating as we can,' Conrad said.
O'Dea said the creditors reviewed the bids from both Charney and Middle East Broadcasting before reaching their decision.
He said Charney's offer would be held as a secondary bid in the unlikely event the Middle East Broadcasting bid turned sour.
As part of its offer, Middle East Broadcasting said it is prepared to invest between $10 million and $12 million to rebuild UPI and make it profitable.
When the wire service filed for bankruptcy protection in August, it listed liabilities of some $60 million and assets of around $22 million.
Sandra Reimer, an attorney for Middle East Broadcasting, said representatives of the company would fly to the United States from London to meet with UPI management.
'This is a worldwide organization,' she said, referring to UPI. 'They don't want to walk in and just change things too quickly.'
Reimer said Middle East Broadcasting executives want a 'smooth transition' with the takeover of UPI.
UPI Executive Editor Steve Geimann said, 'I look forward to working with representatives for the Middle East Broadcasting Centre and sharing with them my ideas for UPI's future and hearing about their ideas for our future.'
Geimann added, 'I'm relieved that the uncertainty we've all lived with for the past several months is now behind us and we can look forweard to a more certain future with an ownership with the resources to keep us in business.'
Kevin Keane, president of the Wire Service Guild, which represents some of UPI's domestic employees, said, 'The new ownership has indicated a willingness to meet with us and discuss a new contract and terms.'
The labor contract negotiated by the existing UPI management has an expiration date of June 30 and covers about 400 employees in the United States. UPI staffers in overseas bureaus are not covered by the contract.
'UPI employees who have sacrified so much are entitled to a good deal,' Keane said, referring to a series of wage cuts the Guild-covered employees voted to accept over the past 17 months to help keep the company alive while it looked for a buyer. UPI management employees took the same wage cuts.
As the bidders upped the ante for UPI earlier in the day, Conrad said his primary concern was the UPI employees. 'They must be living in Dante's hell,' the judge said, referring to the months of uncertainty.
During the hearing, Middle East Broadcasting raised its all-cash bid for UPI to $3.95 million from $3.5 million in several steps after Charney increased his offer to $3.9 million from $3.6 million.
Charney then revised his bid to $3.75 million in cash plus a 10 percent equity stake for creditors that he said would pay them $1 million over five years. He also asked the judge to give him another 24 hours to consult with his partners and said the $3.75 million bid, plus the equity interest, was his final offer.
Lawyers for Robertson argued that his $900,000 offer for the UPI name was the only active bid because he was backing it up with a certified check for $900,000.
Charney told reporters during a break in the hearing that it would be best if UPI remained in American hands and said the news media in the Middle East, including Israel, is subject to censorship.
Charney said he was concerned with 'keeping the American sense of fair play, justice and due process.'
But Reimer, who represents Middle East Broadcasting, said 'one of the things of great value to our client is UPI's reputation.'
She said Middle East Broadcasting offers its services as an alternative to government-controlled news in the Arab world.
'Clearly it's not in their interest to damage that reputation,' Reimer said, referring to UPI's good name.
Michael Costello, a Washington-based consultant for Middle East Broadcasting, said the company intends to keep UPI intact.
MBC's priorities are to modernize UPI's telecommunications, beef up its broadcast operations, maintain the existing client base and support general news on a worldwide basis, including the news agency's domestic service, Costello said.
When Robertson dropped his $6 million offer for all of the wire service two weeks ago, he resubmitted a pared-down bid of $500,000 for the UPI name, its picture archives and a contract for overseas photos. That offer was rejected by Conrad, UPI management and the creditors committee.
After Robertson abandoned his $6 million bid, which had been entered at a bankruptcy auction in Vermont last month, UPI was faced with closing its doors two days later on June 12 without another buyer in the wings.
Charney then put up $180,000 to keep UPI operating while he examined its books before deciding whether to make an offer. Middle East Broadcasting surfaced last Thursday with its plan to make a bid.
UPI, which has been a subsidiary of Infotechnology Inc., was founded by E.W. Scripps on June 21, 1907 and sent its first news report on July 15, 1907. A winner of nine Pulitzer prizes, UPI was sold by Scripps Howard in 1982 and had three owners before Middle East Broadcasting won the bidding Tuesday.
Dennis O'Dea, a lawyer for the creditors committee, told U.S. Bankruptcy Judge Francis Conrad that UPI and the creditors concluded Middle East Broadcasting's bid was 'the highest and best offer.'
'This court accepts the bid of -- what is it? -- Middle East Broadcasting Centre,' Conrad said.
The wire service and its creditors chose the Middle East Broadcasting bid over New York attorney Leon Charney's offer of $3.75 million in cash plus an equity interest of 10 percent in a reorganized UPI and over a $900,000 bid for the UPI name and several assets from religious broadcaster Pat Robertson.
O'Dea said Middle East Broadcasting, which transmits English and Arabic-language news and entertainment to the Mideast, North Africa and Europe, will close the UPI deal Saturday.
Middle East Broadcasting, privately owned by Saudi Arabian investors, will accept financial reponsibility for UPI's outstanding contracts for 30 days while it determines which ones it will assume, O'Dea said.NEWLN: more
Charney put up $180,000 to keep UPI operating while he reviewed the wire service's books during a 10-day period that ended Monday at midnight. He said he will appeal Conrad's decision to accept the Middle East Broadcasting bid.
Charney, who produces and moderates a show on Middle Eastern affairs for public television in New York, said he wanted to determine whether the creditors committee violated an agreement he had with UPI by talking to Middle East Broadcasting during his 10-day review period.
Middle East Broadcasting contacted UPI lawyers last week about making a bid but was prevented from talking to UPI directly under a so-called standstill agreement with Charney while he examined the books.
O'Dea said the creditors reviewed the bids from both Charney and Middle East Broadcasting before reaching their decision.
He said Charney's offer would be held as a secondary bid in the unlikely event the Middle East Broadcasting offer turned sour.
Middle East Broadcasting agreed to provide UPI with a letter of credit for the $3.95 million by Thursday, O'Dea said.
As part of its offer, Middle East Broadcasting said it was prepared to invest between $10 million and $12 million to rebuild UPI and make it profitable.
The wire service has been operating under Chapter 11 bankruptcy protection since Aug. 28, 1991. At that time, UPI listed liabilities of some $60 million and assets of around $22 million.
Sandra Reimer, an attorney for Middle East Broadcasting, said representatives of the company would fly to New York from London to meet with UPI management.
'This is a worldwide organization,' she said, referring to UPI. 'They don't want to walk in and just change things too quickly.'
Reimer said Middle East Broadcasting executives wanted a 'smooth transition' with the acquisition of UPI.NEWLN: more
Executive Editor Steve Geimann said, 'I look forward to working with representatives for the Middle East Broadcasting Centre and sharing with them my ideas for UPI's future and hearing about their ideas for our future.'
Geimann added, 'I'm relieved that the uncertainty we've all lived with for the past several months is now behind us and we can look forweard to a more certain future with an ownership with the resources to keep us in business.'
Kevin Keane, president of the Wire Service Guild, which represents UPI's domestic employees, said 'the new ownership has indicated a willingness to meet with us and discuss a new contract and terms.'
The current UPI labor contract expires June 30 and covers about 400 employees in the United States. UPI employees in overseas bureaus are not covered by the contract.
'UPI employees who have sacrified so much are entitled to a good deal,' Keane said.
As Conrad heard the escalating bids for UPI earlier in the day, he said his primary concern was the UPI employees. 'They must be living in Dante's hell,' the judge said.
During the day, Middle East Broadcasting raised its all-cash bid for UPI to $3.95 million from $3.5 million in several steps after Charney increased his offer to $3.9 million from $3.6 million.
Charney then revised his bid to $3.75 million in cash plus a 10 percent equity stake for creditors that he said would pay them $1 million over five years. He also asked the judge to give him another 24 hours to consult with his partners and said the $3.75 million bid, plus the equity interest, was his final offer.
Lawyers for Robertson, who withdrew a $6 million bid for all of the wire service two weeks ago, argued that his $900,000 offer for the UPI name was the only active bid because he was backing it up with a certified check for $900,000.
Charney told reporters during a break in the hearing that it would be best if UPI remained in American hands and said the news media in the Middle East, including Israel, is subject to censorship.
Charney said he was concerned with 'keeping the American sense of fair play, justice and due process.'
But Reimer, who represents Middle East Broadcasting, said 'one of the things of great value to our client is UPI's reputation.'
She said Middle East Broadcasting offers its services as an alternative to government-controlled news in the Arab world.
'Clearly it's not in their interests to damage that reputation,' Reimer said, referring to UPI's good name.
Michael Costello, a Washington-based consultant for Middle East Broadcasting, said the group intends to keep UPI intact.
MBC's priorities are to modernize UPI's telecommunications, beef up its broadcast operations, maintain the existing client base and support general news on a worldwide basis, including the news agency's domestic service, Costello said.
When Robertson withdrew his $6 million offer two weeks ago, he resubmitted a pared-down bid of $500,000 for the UPI name, its picture archives and a contract for overseas photos. That offer was rejected by Conrad, UPI management and the creditors committee.
After Robertson dropped his $6 million bid, UPI faced a possible shutdown June 12.
Charney then stepped in and put up $180,000 to keep UPI operating while he examined its books to determine whether to make an offer. Middle East Broadcasting surfaced with its plan to make a bid last Thursday.
UPI, a subsidiary of Infotechnology Inc., was founded by E.W. Scripps on June 21, 1907 and transmitted its first news report on July 15, 1907. A winner of nine Pulitzer prizes, UPI was sold by Scripps Howard in 1982 and had three owners before being acquired by Middle East Broadcasting.
