Sun-Times Media Group Inc. has skipped paying its quarterly contribution into several employee pension plans.
The parent of the Chicago Sun-Times and dozens of suburban Chicago-area newspapers, which filed for Chapter 11 bankruptcy protection on March 31, failed to make more than $800,000 in required payments to its five pension plans, according to documents obtained by Crain’s Chicago Business, a sister publication of Workforce Management.
The missed contributions, which were due April 15, include:
• $456,185 for a plan covering Chicago’s newsroom employees.
• $284,581 for a plan covering Chicago office employees.
• $63,063 for a plan covering Pioneer Newspaper employees in the suburbs.
A Sun-Times spokeswoman would not confirm those numbers. She also declined to provide figures for missed payments to the company’s two other pension plans.
Companies in bankruptcy proceedings are still required to make contributions to pension plans unless a waiver is obtained from the Internal Revenue Service, said a spokesman for the Pension Benefit Guaranty Corp.
Asked whether Sun-Times Media had made such a request, a company spokeswoman said, “We have complied with all applicable laws in connection with our failure to make pension contributions.”
It’s imperative that Sun-Times Media polish its financials if it’s to woo a buyer; suspending pension payments preserves cash and improves its balance sheet. The company has taken other steps, including layoffs and pay cuts.
The missed pension plan payments are not related to the media company’s request to pay its executives hefty bonuses if they succeed in selling the company. Any executive bonuses would be paid with “proceeds from the sale,” the spokeswoman said, and “not one single penny” would come from money that could be used to fund daily operations.
The company is in talks with the IRS to resolve a tax bill of more than $500 million left over from its days of being run by Conrad Black, its now-imprisoned former CEO who was convicted of fraud charges last year.
At a bankruptcy court hearing last week, the Chicago-based media company tabled its proposal to pay executive bonuses until the company comes closer to finding a buyer. CEO Jeremy Halbreich told employees last week that he is making progress on that front, but he did not provide further details.