October 23, 2013

Judge delays sale of Boston Globe to Red Sox owner

The New York Times Co. and John Henry had scheduled to close their reported $70 million sale of The New England Media Group on Friday.

The Associated Press

WORCESTER, Mass. — A judge’s order has halted the proposed sale of The Boston Globe to Red Sox owner John Henry.

The order was requested as part of a lawsuit by former adult carriers of Telegram & Gazette of Worcester, which along with the Globe is part of the New England Media Group that Henry is purchasing from the New York Times Co. for $70 million, the Telegram & Gazette reported.

In the 2009 class action lawsuit, the carriers argue they worked as employees of the paper, but were misclassified as independent contractors, which made them ineligible for deserved benefits.

Their attorneys won the temporary restraining order Friday, when the sale was supposed to close, after successfully arguing the sale could prevent their clients from being able to collect a settlement.

The carriers’ claims are likely to succeed on their merits and they would suffer irreparable harm if the sale of the Telegram went through without sufficient money set aside to pay a judgment, Worcester Superior Court Judge Shannon Frison wrote in her order.

Frison forbade any sale until further orders from the court. A spokesman for Henry declined to comment on the order.

In court Monday, the Times asked Frison to lift the order so the sale could be completed in exchange for setting aside a sum of money – determined by Frison – to pay a future settlement with the carriers. But the Times was not willing to assume liability for the suit, which Frison’s order listed as one condition under which she’d allow the sale to proceed. Right now, the Telegram is the suit’s only named defendant.

“I don’t think it was ever The New York Times’ intent to write a blank check to fulfill this judgment,” Mark Batten, an attorney for the Times, said in court Monday.

The Times also argued the plaintiffs only should have access to the Telegram’s assets, not the Times’ or Globe’s.

Meanwhile, lawyers for the carriers want the order to stay in effect until they determine the Telegram’s worth. Attorney James M. Galliher said in court that he worried “creative accounting” would render the Telegram worthless, even though it’s been modestly profitable for years.

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