Two investors who helped finance the purchase of Freedom Communications in 2012 have asked a court to put the media company’s operations into receivership.
The investors, who helped Aaron Kushner and Eric Spitz finance the purchase of the Orange County Register’s parent company, claim that Freedom needs independent oversight because it is “insolvent and in financial distress from mismanagement,” according to website Law360.
Abbey Financial and Old Colony 2012 Investment Fund have filed a complaint in Delaware Chancery Court. They asked the court to fast-track a decision based on the fact that Freedom put the parcel of land that surrounds its headquarters and the offices of the Orange County Register up for sale last month.
In their complaint, the investors claim that Silver Point Finance, which holds the mortgage on all of Freedom’s property, has “undue influence” over the Freedom Communications entities and over Kushner and Spitz, their controlling directors.
Freedom denied it is considering bankruptcy, and called the investors’ claims “meritless,” in a statement emailed to Law360.com
Freedom Communications stopped publishing the Los Angeles Register in late September, five months after it launched. The Los Angeles Times, which had a delivery agreement with the L.A. Register, has sued Freedom, alleging is did not pay more than $2 million due for those services.
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