TORONTO — A judge Friday allowed Canada's insolvent media giant Canwest Global Communications to transfer the National Post into one of its divisions that is not under bankruptcy protection to stave off folding the unprofitable daily newspaper.
Judge Sarah Pepall said the National Post can be moved into the Canwest Limited Partnership.
Canwest is restructuring under bankruptcy protection from its creditors, who had refused to keep funding the newspaper, which has lost 62 million Canadian dollars ($57 million) in the last four years.
A lawyer for Canwest had told court that not only would the move allow the National Post to keep operating, it was essential to a successful restructuring of the whole company.
"The business of the National Post and the LP entities (other Canwest newspapers and media outlets) are highly integrated and interdependent," said Lyndon Barnes. "Without these agreements, the ability to restructure either of these entities is in doubt."
Canwest spokesman John Douglas said the decision by the judge to shift the Post was expected.
"It demonstrates that yet again the voice of our demise has been greatly exaggerated, as it has for 11 years," he said. "We know that the National Post is going to be a positive contributor to the publishing group, and we know that the publishing group will be stronger with it."
In court documents filed this week, Canwest said the Post has racked up CA$62 million dollars ($57 million) in losses over the past four years before factoring in interest, taxes, depreciation and amortization. The Post company also owes CA$139.1 million dollars ($128 million) to Canwest Media, its holding company, because it helped the company with payroll, capital expenditures and operational losses.
Chief Financial Officer John Maguire said in the filing that if the Post's Toronto operations had shut down, the company would have lost an integral part of its news team and been forced to pay about CA$500,000 dollars ($468,000) a year to create or license Toronto-based news content.
About 277 people work at the national daily paper founded in 1998 by the Southam group led by disgraced businessman Conrad Black.
Canwest has amassed CA$4 billion dollars ($3.6 billion) in money owed after buying Black's newspaper assets and the specialty channels owned by Alliance Atlantis.
Media analysts expect Canwest will explore the option of selling off its newspaper division to interested buyers, though representatives for the company have insisted the assets are not for sale.
The company is restructuring its entire operations with the hopes of completing the process by the end of January.