Attorneys for the creditors and management of United Press International, meeting in federal bankruptcy court yesterday, failed to agree on an investment adviser to seek buyers for the news service.
Hopes for a successful reorganization of UPI under Chapter 11 of the federal bankruptcy code lie in the possibility of selling the company, but potential buyers now can approach several entities with conflicting interests -- the management, stockholders, creditors or union.
"Where do people go who want to buy this company?" asked Richard L Levine, an attorney for UPI. "We need to settle this."
All sides agreed a single investment adviser is necessary to seek and analyze offers, but they cannot agree on who should play that role. UPI's management and stockholders had agreed on a compromise, but that was rejected yesterday by an attorney for UPI's unsecured creditors, who objected to the price.
Under the proposed compromise, two investment houses would have jointly served as investment adviser. Bear Stearns & Co. was selected to represent UPI management and Ladenburg Thalmann & Co. was chosen by Media News Corp., which owns all of UPI's stock.
The agreement called for a payment of $500,000, as well as monthly fees that would have required an intitial payment of $115,000 for the first two months and $25,000 a month thereafter.
UPI's Chapter 11 filing listed $45 million in debts and $20 million in assets.
The creditors' attorney, Jules Teitelbaum, said the price was too high. Bear Stearns agreed to drop the $500,000 minimum and shave $115,000 off the monthly fee, but Teitelbaum called the concessions "inadequate."
The court adjourned and will take up the matter again July 12.