1985 Editor & Publisher Piece on FNN Bid for UPI

Here's a December 1985 story from Editor & Publisher:


The U.S. Bankruptcy Court in Washington has issued a temporary restraining order barring Financial News Network from appealing directly to the creditors or clients of United Press International to support the sale of UPI to FNN and six partners.

Even as the order was being issued, however, FNN was submitting a new bid to buy the bankrupt wire service. The bid went not to individual creditors or clients, but to a committee representing the creditors. The committee considered the offer to have been submitted properly. It relayed the offer to UPI management and the Wire Service Guild, representing UPI employees.

A source who had seen the bid -- but hadn't studied it -- said the offer was being taken seriously by the creditors committee. It was described as being significantly different from earlier FNN proposals, which UPI, the creditors committee and the Guild rejected in favor of selling UPI to Mexican publisher Mario Vazquez-Rana, with Houston developer Joe Russo taking a 10 percent share. This arrangement is to be submitted in due course to Bankruptcy Court Judge George Bason for his required approval.

Details of FNN's latest counterproposal may be reported to Bason Dec. 13. On that day, he will hold a hearing to consider extending his temporary restraining order against FNN into a temporary injunction.

UPI management, the creditors committee and the Wire Service Guild had sought the restraining order to stop FNN from directly approaching individual UPI creditors and clients with assertions that it was making a better offer than Vazquez-Rana and Russo. Many clients and creditors telephoned UPI to inquire whether the assertion was correct.

Judge Bason, in a hearing Dec. 2, did not address the merits of FNN's statements, but ripped into FNN for working outside the court's procedures for handling a bankruptcy.

"The actions of FNN have been clearly disruptive and designed to be disruptive of the entire process," the judge said. "It is absolutely crystal clear that it has done things which beyond doubt it should not have done and with no justification whatsoever."

An attorney for FNN argued vainly that his client had a First Amendment right to state its case.

Paul Steinle, president of FNN, prepared a press release, but because of the restraining order, could not issue it without prior approval from the judge.

FNN operates continuous television programs, mostly for cable systems, covering the stock market and other trading activity until 7 p.m., Eastern time, and sports results in the evenings.

# # #