Magazine article Editor & Publisher

Troubles Mount for Maxwell Empire: Meanwhile New York Daily News Creditors Meet as the Newspaper Tries to Find a Way to Survive

Magazine article Editor & Publisher

Troubles Mount for Maxwell Empire: Meanwhile New York Daily News Creditors Meet as the Newspaper Tries to Find a Way to Survive

Article excerpt

Troubles mount for Maxwell empire

The collapse of late New York Daily News publisher Robert Maxwell's empire continues wreaking havoc at the paper, which is fighting for life under the protection of bankruptcy court.

The paper filed for bankruptcy to insulate itself from its English parent company, which has been taken over by court-appointed administrators and could seek to liquidate assets such as the Daily News.

The sudden demise of Maxwell's global media empire, after his mysterious death Nov. 5, was hastened by disclosures that about $1.4 billion in cash and stocks was missing from pension funds of publicly traded and private companies he owned or controlled.

In the months before his death, funds were shifted - possibly illegally - in desperate efforts to prop up his debt-ridden companies and their stock prices. A new estimate put the total debt of companies he owned or controlled at over $4 billion.

Several audits are under way and the British Serious Fraud Office is investigating.

In its bankruptcy filing, the Daily News listed assets of $37.4 million and liabilities of $53.3 million. Its competitor, New York Newsday, reported that the Daily News owed $50 million and was losing $2 million a month.

In the latest developments:

* Maxwell Communication Corp. PLC, one of two publicly traded companies Maxwell owned a majority interest in, filed for bankruptcy court protection in New York. It owes more than $2.3 billion to 40 banks.

It filed in New York because most of its $1.7 billion annual revenues are derived from its U.S.-based publishing house Macmillan Inc., which Maxwell bought for $2.6 billion in 1988, when he picked up Official Airline Guides for $750 million.

Maxwell Communication and Mirror Group Newspapers PLC, both based in London, were the flagships in Maxwell's empire, which he controlled through a web of private companies.

* Maxwell's grand idea of a newspaper for Europe became the first newspaper casualty of the debacle he bequeathed his sons, Kevin, 32, and Ian, 35. Based in London, The European closed Dec. 12 after 19 months in business, leaving 145 employees jobless. …

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