The official committee of United Press International creditors asked a federal bankruptcy judge for permission to consider new offers for the financially troubled wire service in a move that may reopen a bidding process thought to have been won several weeks ago by a Mexican newspaper magnate.
The creditors said in a complaint filed this week in bankruptcy court in the District that the bidding process for the company "appears to have been overly expeditious." They asked for permission to consider what they described as a "better offer" from a consortium of investors led by Financial News Network, a cable firm.
UPI filed for bankruptcy last April, precipitating months of negotiations aimed at finding a buyer for the debt-ridden news agency. The process apparently came to a close last month after a $41 million offer for the company by Mexican publisher Mario Vazquez Rana was endorsed by the creditors, UPI management and the union representing the wire service's workers.
However, soon after the endorsement was announced, reports of confusion in the bidding process surfaced. Financial News Network, the losing bidder, launched a campaign aimed at convincing the creditors and UPI's subscribers that the bidding process was unfair and that its offer had not been given due consideration. A recently revised FNN bid offers unsecured creditors $16.1 million, or 60 cents on the dollar, compared with 40 cents in the Vazquez offer.
"The creditors committee is in the position of having previously resolved to support what it then considered to be the best offer, and subsequently receiving a better offer," the complaint states.
David R. Towey, a lawyer for FNN, refused comment on the complaint. UPI spokesmen could not be reached, although the company's management has said it is strongly committed to the Vazquez bid.
Bason has scheduled a hearing for tomorrow.