Officials of the Reuter news agency met with managers of United Press International yesterday about a possible takeover of the troubled wire service by Reuter, but the session produced no agreement and the two companies have no plans to meet again, according to a UPI spokesman.
Meanwhile, a federal bankruptcy judge, in a unique ruling yesterday, said that it was more important for UPI to keep operating and fulfilling First Amendment needs than it is for the Internal Revenue Service to try to collect $1.8 million in back taxes from the wire service.
UPI is operating under protection from its creditors under Chapter 11 of the federal bankruptcy code. Its feuding owners and managers are attempting to bring the company out of Chapter 11 by selling it, but so far apparently have found no takers.
The meeting with Reuter officials, which UPI spokesman David Wickenden described as "very brief," apparently did not lead to an offer by Reuter officials. UPI's owners have claimed that Reuter is interested in buying the company but is being dissuaded by an alleged disinterest on the part of top UPI managers. Yesterday's meeting was the second between the managers and Reuter in several weeks; Reuter officials also recently met with owners Douglas Ruhe and William Geissler.
Although there are no plans for a further meeting with Reuter, Wickenden said UPI Chairman Luis Nogales planned to meet soon with "other significant players" interested in buying all or part of UPI. He would not be more specific.
The wire service stemmed one crisis in court yesterday when Bankruptcy Judge George Francis Bason Jr. denied an IRS request that UPI be blocked from paying $190,000 to Prudential Insurance Co. for employe health benefits. The IRS had argued that UPI should pay its $1.8 million in back payroll taxes before being allowed to pay Prudential.
The judge ruled that the bankruptcy code allowed payment such as the one UPI wanted to make to Prudential to give a company operating under Chapter 11 a chance to return to health.
And Bason said that while "there is strong public interest in tax collection . . .that one public interest is overshadowed by the concurrence of public interests in other aspects. It is rare and perhaps unique that we have the concurrence of so many strong public interests. . . . Most persuasive to this court is that the First Amendment is a tremendously powerful reason for denying" the IRS's request.
"There is primary importance in observing a free press in the context of the public's right to know," Bason said. "It seems to me there are strong public policies and First Amendment dimensions that will argue in favor of giving UPI whatever rights the law allows toward obtaining a successful rehabilitation of a company engaged in dissemination of information on a worldwide scale."
Dan Carmichael, an official of the Wire Service Guild, which represents about half of UPI's employes and most of its writers and editors, had told the court that there would be "massive defections" of UPI employes if the company's health plan was not fortified through the agreement with Prudential.