A federal bankruptcy court judge in Delaware has approved the sale of the Boston Herald to Digital First Media for nearly $12 million.
The approval was expected after Digital First, which is controlled by New York investment firm Alden Global Capital, emerged as the top bidder for the Herald at an auction Tuesday at the Boston offices of Brown Rudnick, the Herald’s law firm. Digital First narrowly beat rival bidder GateHouse Media, which had roughly doubled its initial bid for the Herald.
Pat Purcell, the Herald’s publisher, is using the bankruptcy process to shed the paper’s debt — about $31 million in liabilities, as of December — to make it more viable for a potential seller. He had been losing money amid the industry’s prolonged advertising downturn.
The Herald employed about 240 people at the time of the Chapter 11 bankruptcy filing in December. Digital First has agreed to offer jobs to 175 Herald employees when the sale process is complete, expected at the end of March.
Digital First has a reputation as a cost-cutter and is in the midst of buyouts and layoffs at a number of its publications, including the Orange County Register and the Mercury News of San Jose. The company owns dozens of newspapers around the country, including two dailies in Massachusetts: the Lowell Sun and the Sentinel & Enterprise in Fitchburg.Jon Chesto can be reached at email@example.com. Follow him on Twitter @jonchesto.