June 1986 Houston Post Story on UPI's Sale

Here's a story by The Associated Press that appeared in the June 11, 1986, Houston Post concerning the sale of UPI to Mario Vazquez Rana Joe Russo:

WASHINGTON (AP) -- A U.S. Bankruptcy Court judge signed over control of United Press International to Mexican newspaper publisher Mario Vazquez Rana and Houston real estate developer Joe E. Russo after a majority of the news service's creditors approved a reorganization plan.

Judge George Bason Jr., signed the order after Vazquez Rana, who heads a partnership that is purchasing UPI for $41 million, testified that he was "prepared to start a long process to get UPI moving again."

Russo, the developer of Lyric Center in Houston's central business district and a number of structures in the suburbs, said he was pleased by the outcome. "It's been a difficult journey, but a worthwhile one," he continued. "I'm anxious to get started."

Richard Levine, an attorney for UPI, said 130 creditors with claims exceeding $3,000 agreed to the plan during a month- long balloting process. Five creditors rejected the proposed reorganization plan.

"Thus 96 percent in number and 99 percent in dollar amount voted to accept," Levine told Bason.

The court only considered creditors owed more than $3,000 because those owed less than $3,000 will be reimbursed in full. The reorganization plan calls for the rest of the creditors to receive between 45 and 48 cents on the dollar.

Bason is conducting a final hearing in the reorganization process before approving the sale of UPI to Vazquez Rana. The judge said he hoped to conclude the matter today but summoned Vazquez Rana to the court to give a presentation.

Before delving into the details, Bason said he was happy that the complicated proceedings appeared near an end.

"I am enormously pleased," Bason said. "I believe that (UPI's) future has now been assured for the foreseeable future. I'm delighted to see voting on the proposed plan has result in such a great unanimity of opinion."

Jack Kenney, UPI's treasurer, told Bason that Vazquez Rana hoped to close the deal immediately after the court's approval.

The Mexican publisher, who has already provided $2.5 million in working capital to UPI, deposited more than $29 million at a local bank, Kenney said. The money includes $25 million in certificates of deposit and the rest in cash, he said.

UPI filed for protection from creditors under Chapter 11 of the bankruptcy code on April 28, 1985. It listed debts of $40.2 million and assets of nearly $24 million.

Vazquez Rana is the owner of the Mexican Editorial Organization, the largest group of newspapers in Mexico with about 60 newspapers. He also has major business and industrial interests, including the Hermanos Vazquez chain of furniture and appliance stores.