A group of unidentified investors offered to buy United Press International yesterday, pledging to pay off about $17 million of the news service's debts and to support continued operations for at least a year, in an effort to rescue the company from bankruptcy.
The investors presented "a very generous and very fair offer to all involved," said David M. Rubenstein, a partner with the Washington law firm of Shaw, Pittman, Potts & Trowbridge, who presented the offer to UPI management.
Richard Beatty, an attorney with the same firm, also signed the offer, said Rubenstein, who served as deputy domestic policy adviser to President Carter from 1977 to 1981.
The attorneys did not disclose the names of the investors even to UPI because they want the parties involved to "focus on the terms," Rubenstein said. The individuals, who are "very prominent" and "of substantial" financial means, also do not want to be "besieged by calls," Rubenstein said.
Attorneys for UPI said they would not comment "on any offer that may or may not have been made for UPI or its assets."
UPI management, led by Chairman Luis Nogales, knows some members of the investor group, which numbers fewer than six and includes individuals with experience in the media, Rubenstein said. Some investors are local figures, he said, adding that he is not a member of the group.
If their offer is accepted, the investors will reveal their identities in two weeks and give UPI the option of pulling out at that time, Rubenstein said.
The investors are "committed to preserving UPI's 75-year tradition of independence, professionalism and excellence" as an international news service, Rubenstein said. Other potential buyers had suggested shutting down or selling off parts of UPI.
The Washington-based news service is now operating under protection from its creditors under Chapter 11 of the federal bankruptcy laws. UPI listed $45 million in debts and $20 million in assets when it filed for protection in late April.
Under terms of the offer, the group would "meet all existing financial obligations of UPI in a responsible way so UPI can emerge from bankruptcy without indebtedness," Rubenstein said. He said that under the terms of the offer:
* The investors would pay about $1.5 million in lawyers' fees, banking costs and other administrative expenses of UPI. They would pay off "all legal obligations to the secured creditors," but did not specify the amount in the offer. UPI has estimated those debts at about $8 million. Rubenstein said the group would pay "whatever is required by law."
* They would pay about $5.1 million to the unsecured creditors, which is about 18 percent of the roughly $28 million they are owed.
* They would pay all federal and state taxes owed, an estimated $3.3 million. The investors pledge an unspecified amount of working capital to support operations for one to two years, while management continues its efforts to turn the company around financially.
One condition of the offer is that UPI management reach a new collective bargaining agreement with its 900 union employes, subject to review of the buyers.
UPI has not made an annual profit in 20 years, but it reported a $400,000 profit in the first six weeks after its bankruptcy filing. Management has predicted that profits this year could reach $2 million or $3 million.
The creditors' committee would have to approve the offer before it is submitted to the federal bankruptcy court for final approval. Rubenstein said that UPI's management and stockholders would be allowed to review the offer and make recommendations to the creditors and the court but would not be in a position to accept or reject it.
The stockholders, Nashville entrepreneurs Douglas Ruhe and William Geissler, bought UPI in 1982 for $1 from Scripps-Howard, receiving more than $5 million in "working capital" in the bargain. Feuding between the two owners and Nogales was seen as a major obstacle to the company's reorganization and sale until the bankruptcy court forced them into a truce.
Rubenstein said the potential buyers hope to reach an definitive agreement before Aug. 15 and to close the deal by Dec. 1.