Freedom Communications tries to keep bankruptcy documents secret

Freedom Communications, parent of The Gazette, is throwing up roadblocks in its bankruptcy case by designating more than 1 million documents as confidential, including a Dodgers baseball game schedule and poetry, said the unsecured creditors committee in a court filing in Delaware today.

“The gamesmanship has to stop if these Chapter 11 cases are to proceed in an orderly fashion for the benefits of all constituents,” the creditors said in their motion, noting Freedom even designated blank sheets of paper as confidential.

Freedom, which voluntarily filed for Chapter 11 bankruptcy reorganization Sept. 1, did not have an immediate response to the creditors’ charge it is impeding their work. The company is scheduled for a legally-mandated meeting with the creditors on Monday and will be in court that afternoon for a hearing on the confidentiality issue and several other motions.

The disagreement stems from a request by the Irvine-based media company that all members of the unsecured creditors committee sign confidentiality agreements before having access to all of Freedom’s documents in the case.

Four committee members signed, but the Pension Benefit Guaranty Corp. refused because it claims it is required by law to disclose information if requested by Congress or other agencies. The PBGC, which oversees the country’s pensions, cited the Freedom of Information Act among other things in claiming that it could not withhold information from Congress.

The pension organization, asked the court to grant it access to the documents with a modified non-disclosure agreement that would still permit it to perform its government duties.

Freedom argued in response that it was standard practice in a bankruptcy to require the creditors committee members to sign a confidentiality agreement.

The company contended that if PBGC can disclose information to Congress or another agency, there is no guarantee of confidentiality.

“Absent a PBGC confidentiality obligation to match that of the other committee members, the debtors rightly fear that sensitive business information may be disclosed to third parties within the government who themselves are neither members of the committee nor even creditors in these Chapter 11 cases,” said Freedom.

The company suggested that the PBGC sign the confidentiality agreement already signed by the other committee members and then, if Congress or an agency requests disclosure of some information, that it petition the court for approval.

Freedom filed for bankruptcy after reaching agreement with its lenders on restructuring its debt.  The media company, which owns 33 dailies, 77 weeklies and other publications and eight television stations, said in its September bankruptcy filing that it had $1.077 billion in debts, including $770.6 million owed to its lenders.

Read the unsecured creditors committee motion HERE.

Read the PBGC motion HERE.

Read Freedom’s response to the PBGC HERE.