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Magazine article Editor & Publisher

Extended Life

Article excerpt

Bankruptcy court OKs transfer of N.Y. Post ownership to Steven Hoffenberg; another businessman invests $3 million

THE IMPERILED NEW York Post has found a rich uncle and won court proval for a new owner.

The developments improve short-term prospects for the long-struggling tabloid, whose lack of advertising support has kept it in the red for more than a decade, despite circulation now over 400,000.

The expected transfer of ownership from bankrupt real estate developer Peter Kalikow to legally embattled businessman Steven Hoffenberg was proved Feb. 19 by U.S. Bankruptcy Judge Burton Lifland, who described Hoffenberg as "the only game in town."

But Hoffenberg, who has put up $6 million to replace a credit line and has taken control of the paper, was seeking other investors to keep the Post alive since he has been restricted in using funds from his Towers Financial Corp. debt-collection company.

Kalikow's creditors approved the transaction because, although Hoffenberg provides relatively little cash, he accepts the Post's liabilities.

The Securities and Exchange Commission won a federal court order limiting Towers' finances pending the SEC's civil court case accusing Hoffenberg and two other executives with massive fraud, illegal sales of securities and inflating financial figures. The SEC took no stand on the transfer of the Post but has opposed its using Towers' money.

On Feb. 21, two days after Kalikow's bankruptcy hearing, wealthy New York businessman and political hopeful Abe Hirschfeld came to the rescue. Hirschfeld invested $3 million to meet the Post's cash needs and was named chairman of the paper, according to a joint statement.

Hoffenberg has said Hirschfeld, who will be the only other investor in the Post, could invest more, and his ownership could range to 50%, though details of the association had not been finalized.

"With Abe and myself on the business side," Hoffenberg said, "editor in chief Pete Hamill now has the financial ammunition to hire the reporters and do whatever he needs to take out the News, Newsday and the Times. Look out, New York."

With cash from Towers limited, Hoffenberg had been asking friends to guarantee that the Post would make good on $3. …

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