Sun-Times Media Group Inc. has skipped paying its quarterly contribution into several employee pension plans.
The parent of the Chicago Sun-Times and dozens of suburban newspapers, which filed for Chapter 11 bankruptcy protection March 31, failed to make more than $800,000 in required payments to its five pension plans, according to documents obtained by Crain's Chicago Business, a sister publication of Pensions & Investments. The missed contributions, due on April 15, include:
•$456,185 for a plan covering Chicago's newsroom employees;
•$284,581 for a plan covering Chicago office employees; and
•$63,063 for a plan covering Pioneer Newspaper employees in the suburbs.
A Sun-Times spokeswoman would not confirm those numbers. She also declined to provide figures for missed payments to the company's two other pension plans.
Companies in bankruptcy proceedings are required to make contributions to pension plans unless a waiver is obtained from the Internal Revenue Service, a spokesman for the Pension Benefit Guaranty Corp. said.
Asked whether Sun-Times Media had made such a request, a company spokeswoman said, “We have complied with all applicable laws in connection with our failure to make pension contributions.”
(The Money Market Directory listed two defined benefit plans under Sun-Times Media Group: one for employees represented by the Newspaper Guild, with assets of $22.4 million at year-end 2006, and a master retirement trust, with $248.3 million at year-end 2005.)
It's imperative that Sun-Times Media polish its financials if it's to woo a buyer; suspending pension payments preserves cash and improves its balance sheet. The company has taken other steps, including layoffs and pay cuts.
Last month, the company reported the moves had succeeded in slowing its burn rate and that its cash balance stood at $25 million.
The company is in talks with the IRS to resolve a tax bill of more than $500 million left over from its days of being run by Conrad Black, its now-imprisoned former CEO who was convicted of fraud charges last year.
Ann Saphir and Lorene Yue are reporters at Crain's Chicago Business.