A national union representing Boston Herald employees will press a US Bankruptcy Court judge to require that the struggling newspaper continue to pay into their pension accounts and provide them with severance and vacation pay.
Bernie Lunzer, president of the Washington, D.C.-based NewsGuild-CWA, said the union will put in claims “for anything we believe is owed to us as a creditor.”
As part of his planned sale of the newspaper to GateHouse Media, the Herald’s owner, Pat Purcell, filed for bankruptcy protection on Friday. GateHouse’s offer of $4.5 million is contigent on a successful bankruptcy reorganization, and Purcell had said that GateHouse does not want pick up the pension obligations to the Herald’s many unions.
The bankruptcy process “obviously is an effort to shed all claims. That doesn’t mean that Purcell will be successful in that,” Lunzer said.
“In this case it’s a reorganization – GateHouse is purchasing the company. We hope to rebuild it out of the ashes. We’ll be fairly demanding. We’ve worked with GateHouse with a number of other properties. We’re putting pressure on GateHouse and will continue to do so.”
The Herald employs about 240 people, including 140 with union contracts. About 175 people are expected to be hired by GateHouse.
A bankruptcy judge in Delaware on Wednesday ruled that the Herald can continue to pay its employees and make contributions to employee health and other benefits programs, on an interim basis.
The court set Jan. 4 for a hearing on some of the major reorganization requests from the Herald.
Twelve of the 30 largest creditors listed in the Herald’s bankruptcy filing in Delaware are retirement plans and unions.
Lunzer said he believes the NewsGuild is the Herald’s largest creditor.
The union has hired a lawyer to ensure the Herald continues to pay into a pension plan the Guild administers for newsroom employees, Lunzer said.
The Herald’s business-side employees, such as advertising representatives, are covered by a separate pension plan that’s not administered by the union.
Pension obligations not assumed by a buyer would be covered up to a certain amount by the federal Pension Benefit Guaranty Corporation. But the only way the newsroom workers would end up being covered by the government is if the Herald went out of business completely, Lunzer said.
“We’ve been involved in a number of bankruptcies,” Lunzer said. “We’ll advocate for our people as best as we can.”
In court Wednesday, an attorney for the Herald said the company has meetings scheduled with four of its unions and predicted the company would reject its existing collective bargaining contracts.
But Lunzer predicts that GateHouse will recognize the union if the sale goes through.
Teamsters Local 25, another union that represents Herald employees, declined through a spokesman to comment.
Brian Whelan, president of the NewsGuild-affiliated Greater Boston Newspaper Guild Local 31032, said in a statement that Herald employees are concerned about their futures.
“At the moment we just don’t have all the answers to a whole lot of questions,” Whelan said.
“We can say that we have a lot of concerned employees who are now looking at a future where they don’t have a pension and they don’t have a severance. The Guild’s ultimate goal is that all parties concerned do the right thing and try to protect these people that have dedicated their lives to making Boston a 2-newspaper town.”
The Herald has also asked the bankruptcy judge to approve its hiring of the law firm Brown Rudnick to handle the bankruptcy case. In court documents, the Herald said it has already paid the law firm $269,000 to prepare for the bankruptcy filing.
Brown Rudnick has proposed charging $615 per hour going forward for its lawyers working on the case.
Representatives for the Herald and for Brown Rudnick declined to comment this week.Material from the Bloomberg News was used in this report. Katheleen Conti can be reached at firstname.lastname@example.org. Follow her on Twitter @GlobeKConti. Jon Chesto can be reached at email@example.com. Follow him on Twitter @jonchesto.