Brad McElhinny/MetroNews
The Charleston Newspapers building was the combined home of The Charleston Gazette and The Charleston Daily Mail for many years.

CHARLESTON, W.Va. — West Virginia’s largest newspaper is being marketed for sale, according to court documents filed this week.

Bankruptcy may also be a part of what’s ahead for The Charleston Gazette-Mail, according to documents filed in U.S. District Court for the Southern District of West Virginia.

“According to counsel for Respondents, as of the end of December 2017, a successful bidder has been identified for the purchase of the Gazette-Mail, negotiations are ‘proceeding apace’ with regard to the terms of the transaction, and as soon as the sale of the Gazette-Mail or its assets is complete, the Gazette-Mail and/or Respondents are expected to file for bankruptcy,” stated Marshall W. Anstandig, senior vice president for MediaNews Group.

MORE: Read the declaration.

That document was filed as part of an ongoing financial dispute between Charleston Newspapers and MediaNews, the former owners of the Charleston Daily Mail.

The two sides have been fighting in federal court over the past few months over whether the Gazette-Mail’s owners should have to pay a $3.8 million arbitration award over the closure of the Daily Mail and the sale of www.dailymail.com.

MediaNews on Wednesday filed a motion for an expedited hearing in anticipation of a pending sale of the newspaper to another company. The document states a newspaper sale would significantly impair MediaNews’ ability to collect its judgement.

MORE: Read the motion for an expedited ruling.

That document states, “Respondents are actively seeking to sell all of the operating assets of the Daily Gazette Company, and have identified a buyer for these assets.”

Trip Shumate, president of the Charleston Newspapers, wrote a memo to department heads at the newspaper responding to the MediaNews filing and its contentions.

“Regarding the issues of bankruptcy and sale, Charleston Newspapers is facing financial difficulties, just as many newspapers across the country are currently,” Shumate stated in a portion of the memo. “We continue to look for a viable solution and all options remain on the table.”

The newspaper’s history dates back to the late 1800s with the publication settling on the name “The Charleston Gazette” in 1907.

The Chilton family first acquired formal interest in the paper about 1912, and the family continues to hold the majority interest. Trip Shumate is married to Susan Chilton Shumate, the current publisher. Her mother, Elizabeth Chilton, is president of the Daily Gazette Company.

The Gazette combined with The Charleston Daily Mail 2015, with owners describing a more efficient operation as one of the reasons.

The Charleston Gazette-Mail was awarded a Pulitzer Prize in 2017 for investigative reporting by Eric Eyre focusing on how a wave of pharmaceuticals contributed to West Virginia’s opioid crisis. The Daily Mail, which was owned for many years by the Clay family, won a Pulitzer for commentary written by Jack Maurice in 1975.

MediaNews Group, now doing business as Digital First Media, filed a breach of contract claim last year. The company had sold its minority share in Charleston Newspapers a decade earlier but continued to be paid a management fee for its continued association with the Daily Mail, mainly for anti-trust reasons..

The declaration filed in court this week by Anstandig claims the newspaper has been making moves to prep for sale.

It claims the Gazette-Mail’s owners retained the firm of Dirks, Van Essen & Murray, the leading merger and acquisition firm in the United States newspaper industry to sell the operating assets of the Daily Gazette Company, including the Charleston Gazette-Mail, and associated real estate.

The memo by Shumate says Charleston Newspapers has had a longstanding relationship with Dirks, Van Essen & Murray.

“They are under contract currently to assist us in achieving the highest and best value of our operating assets,” Shumate wrote.

One of the moves for sale prep, MediaNews contends, was a December agreement with the Pension Benefit Guaranty Corporation for unfunded withdrawal liability in order to obtain a release of its liens. The agency took over the Charleston Newspapers’ distressed retirement plan in October, 2016.

That left United Bank in the sole position of having a priority lien on the Gazette-Mail’s assets, according to MediaNews.

Shumate, in his memo, confirmed the agreement with the Pension Benefit Guaranty Corporation. “Nothing contained in that agreement affects Charleston Newspapers’ ongoing business and operations,” he wrote.

The Gazette-Mail has been clear about ongoing financial trouble during its dealings with MediaNews.

In one filing this fall, Richard Neely, the lawyer for the Gazette-Mail, discussed the economic pressures that led the newspaper to sell the dailymail.com domain name.

“The Arbitrator has made a great moment of the fact that at the time of the sale of the URL, United Bank had not declared a default,” Neely wrote.

“But the evidence clearly shows that Daily Gazette Co. was in default: Since when is it necessary for the Bank to ‘declare’ a default when the bank and the customer are working either to cure the default or renegotiate terms. The truth of the matter is that Daily Gazette Co. was in default at the time they needed to sell the Daily Mail URL in order to prevent the bank from formally declaring a default.”

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