NEW YORK — The Star Tribune of Minneapolis and representatives of its printer's union said Thursday they will resume negotiations over cost cuts the newspaper insists it needs to survive.
Four union negotiators arrived in New York Thursday to resume the talks after the second of three days of bankruptcy court hearings on the newspaper's request for permission to abandon its contract with the local unit of the International Brotherhood of Teamsters.
Lawyers for the newspaper, which filed for Chapter 11 bankruptcy protection from creditors in January, told U.S. Bankruptcy Judge Robert Drain at the start of hearings Wednesday that it needs $3.5 million in concessions from its printer's union as part of $20 million in total cuts from 10 unions.
Failure to reach a deal Thursday would send the company back to court for the final hearing Friday. Saying he would likely decide quickly and issue his ruling from the bench, Drain urged the two sides to work out a deal.
"At this point I think it really is a serious matter," he said. "I really urge you and the company to do what you need to do."
Drain said lenders were demanding cost cuts and the newspaper was in jeopardy without such reductions.
"As powerful as bankruptcy judges are, if a secured creditor comes to me and says we're willing to accept liquidation, I don't have a magic wand at that point to stop them," he warned union representatives.
A Star Tribune spokesman said the newspaper hoped to reach a deal out of court.
"We have always hoped to achieve the savings we need through negotiation," spokesman Ben Taylor said by e-mail. "That is how we prefer to resolve this."
The Star Tribune, the nation's 15th-largest newspaper, has sought protection from creditors while it tries to reorganize its businesses and finances. Amid an industrywide decline in advertising revenue, the newspaper is burdened by heavy debt it took on when Avista Capital Partners LP bought it from McClatchy Co. in March 2007.
The cancellation of the contract would affect 116 union employees. The company has not said whether it would take similar action against unions representing another 600 workers. Besides the pressmen, the newspaper's four largest unions represent newsroom employees, drivers and mailroom workers.
As of December, the newspaper had $667 million in debt, $492 million in assets and $27 million in cash. So far, it has skipped $20 million in interest payments to lenders. From early 2007 to the end of last year, the newspaper has cut $50 million in costs.