Three Tribune Publishing board members affiliated with Alden Global Capital, a hedge fund seeking 100% control of the Chicago-based company, should be removed for violating securities laws, a labor union demanded Tuesday.
The NewsGuild-CWA, which represents journalists at the Chicago Tribune and six other major newspapers within the company, said the Alden-aligned directors failed to notify shareholders of the hedge fund’s proposal to buy the entire company within 10 days as mandated by the Securities and Exchange Commission. The union said the violation was apparent in Alden’s notice to the SEC, signed by Randall Smith, Alden co-founder and one of the hedge fund’s three Tribune Publishing directors.
The SEC filing was a “signed letter of corporate malfeasance,” said the Chicago News Guild, the NewsGuild local that has members at the Chicago Tribune, in a letter to Tribune Publishing Chairman Philip Franklin. The letter called on the board to schedule a special meeting to vote on removal of Smith and Alden’s other representatives, Christopher Minnetian and Dana Goldsmith Needleman.
The Chicago News Guild also represents newsroom employees at the Chicago Sun-Times.
Alden has the board seats because it acquired a 32% stake in the company in 2019. In an SEC filing Dec. 31, 2020, Smith disclosed Alden’s interest in buying the remaining shares for $14.25 each. Smith’s letter said the offer was made to the rest of the board Dec. 14 and discussed with an independent shareholder three days earlier. The union said that means the shareholder notice was outside the 10-day window.
Known for its deep layoffs in newsrooms, Alden could be looking to combine its Media News Group, owner of about 200 dailies and weeklies, with Tribune Publishing. Its activities have spurred protests about hedge fund control of news outlets and drawn criticism from members of Congress. Employees have waged campaigns to get local investors to buy several Tribune-owned titles.
A Tribune Publishing spokesman declined to comment and the SEC had no immediate response. The company has said a committee of three independent directors will review the Alden offer, which valued the company at $520.6 million.
An Alden employee had no comment, although the Wall Street Journal quoted a hedge fund spokesperson as saying, “The union has its facts wrong and has reached numerous important and incorrect factual and legal conclusions. The offer is in conformance with legal requirements and fiduciary duties.”
Jon Schleuss, NewsGuild president, said the Alden board representatives have put their interests ahead of responsibilities to shareholders. “Alden is treating Tribune shareholders with the same disrespect it has for its employees, the newspapers they own and the communities they serve.”
Tribune Publishing properties include the New York Daily News, the Baltimore Sun and the Orlando Sentinel.