Judge approves crucial loan to keep Alaska Dispatch News operating through bankruptcy

A federal bankruptcy judge on Monday approved a $1 million loan to keep the lights on and the doors open at Alaska Dispatch News as the company works its way through a Chapter 11 bankruptcy.

Judge Gary Spraker and Northrim Bank also gave the OK for Alaska Dispatch News to use its money in its bank account to pay wages to employees and to pay past-due health insurance premiums.

The loan, known as "debtor in possession" financing, will come from Binkley Co. LLC, a group poised to buy Alaska Dispatch News from its current owner, Alice Rogoff. Ryan Binkley of Fairbanks and Jason Evans of Anchorage are the new publishers of the paper.

"I think there's been substantial testimony showing the need for the DIP loan and the lack of any alternative," Cabot Christianson, an attorney representing Alaska Dispatch News, told the bankruptcy court judge in Anchorage.

Alaska Dispatch News LLC filed for Chapter 11 bankruptcy protection Aug. 12. Without the loan from the Binkley group, the company wouldn't have been able to even make payroll this Friday, Binkley group attorney Erik LeRoy said last week.

[Alaska Dispatch News will be able to pay carriers, but newspaper is still on the brink]

Much of Monday's hearing in bankruptcy court was taken up by discussion about the fate of two printing presses Alaska Dispatch News owns in leased warehouse space on Arctic Boulevard.

"Those presses could be something we buy, or, they could be something that are included in our purchase," said Erik LeRoy, an attorney representing the Binkley group.

By the end of the hearing, it was still unclear what exactly will happen with those presses, or who might be responsible for removing them from that leased warehouse if a solution doesn't involve leaving them there.

"There is a whole host of items there, of unanswered questions," Spraker said.

Another key piece of Alaska Dispatch News' operations is the former Anchorage Daily News building on Northway Drive that houses the press still used to print the six-day-a-week newspaper. The building is now owned by telecommunications company GCI, which filed an eviction lawsuit earlier this month to kick out Alaska Dispatch News from the space.

In a separate hearing Monday morning in Anchorage Superior Court addressing that eviction suit, a judge said the matter belonged in bankruptcy court.

"It is more complicated than a simple 'leave the premises,' given the printing press and other things," said Judge William Morse. "So, I'm perfectly willing to let the bankruptcy court act first."

That eviction lawsuit is a huge moving piece of the bankruptcy case. Without the ability to print the newspaper on the press at the Northway building, Alaska Dispatch News would likely fold, said Rogoff, the current owner.

"If the print newspaper were discontinued, the company would lose the bulk of its operating revenue," Rogoff said in a sworn statement filed in the bankruptcy case last week. "The company could not cover basic operating expenses and would be forced to cease operations."

Last week, LeRoy, the Binkley group attorney, said an agreement to keep the newspaper's operations there until October had been reached. Attorneys representing GCI said at the eviction hearing Monday morning that an agreement to allow Alaska Dispatch News to stay at the Northway building until Oct. 11 was still being worked out.

"The court has agreed to allow the bankruptcy court to address any potential use of the premises during the pendency of the bankruptcy hearing, and we'll revisit this question with this court if things change in the bankruptcy," said Becky Windt Pearson, corporate counsel for GCI.

"They're either going to keep operating that press at Northway or they're going to find another way to print the paper," LeRoy said.

Heather Handyside, a spokeswoman for GCI, said Monday evening that the telecom has been negotiating with Alaska Dispatch News and the Binkley group to reach a deal "that could allow the Binkleys to remain on the premises for up to 16 months," but those negotiations haven't concluded. Ultimately, she said, GCI still wants the press out of the space.

"We're just kind of reserving the right to proceed with the eviction process," Handyside said. "We realize it may take awhile for the press to be moved. We've been waiting for the press to be moved since 2014. We're going to give the new owners time to make that happen, but with the clear understanding that that is our goal. … It's because it's Alaska's largest paper and we really want the paper to continue."

She later said in an email that GCI wants Rogoff to "reaffirm that she will (guarantee) payment of the costs of removing ADN's press from GCI's building."

Alaska Dispatch News lost $4 million in the first half of this year, Binkley told staff last week. It continues to lose about $125,000 a week, according to bankruptcy filings.

The next hearing for the eviction case in Anchorage court is set for Oct. 13. The next bankruptcy court hearing is Sept. 11. At the September hearing, the court will consider a motion to sell Alaska Dispatch News to the Binkley group.