Explaining Southern California's economy

So how much did a private investor group pay for the OC Register?

OCR-Front

The Orange Country Register's parent company, Freedom Communications, has been acquired by a Massachusetts investment group. The size of the deal remains a mystery.

On Monday, Boston greeting card mini-mogul Aaron Kushner, along with a group of investors, announced the acquisition of the remaining assets of Freedom Communications, whose flagship media property is the Orange County Register.

The price remains unknown. As does the financing on the deal. And in Boston, they're even asking out loud whether this means it's game over for Kusnher's effort to buy the Boston Globe from the New York Times. His rumored bid was $200 million, which seems pretty low. The New York Times Company's former CEO, Janet Robinson, departed late last year with a $23-million severance package in tow. She didn't want to sell the Globe. But it's entirely possible that the NYT Co. now does.

The Boston Herald spoke with an academic and former newspaper editor to get his take:

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Twinkies get even more troubled

Hostess Twinkies Celebrate 75th Anniversary

Tim Boyle/Getty Images

Four of the Twinkies that (ahem) drove Hostess Brands into a second bankruptcy since 2004.

Hostess Brands, the company that makes Twinkies, is in bankruptcy — the second time since 2004. And if it can't come to terms with both its creditors and its union workforce, it could be game over for the allegedly indestructible cream-filled cake-y yellow tube of fun and all its snack-y brethren. A strike looms. This is from CNNMoney:

"We would no longer have cash to keep operating," said Hostess management in a letter sent to employees on Monday. "All Hostess Brands operations would shut down and liquidation would begin. The 18,500 jobs, plus the health insurance that comes with them, would be lost for good."

The company filed for bankruptcy in January...[M]anagement has said that the investors who are financing the company during bankruptcy would pull out if there is a strike.

Liquidation means that Hostess Brands would essentially be sold for parts. And you have to figure that, if there's anyone out there interested in the Twinkies brand, it would be snapped up in a serious hurry. However, this really looks more like brinksmanship, between management and labor — a classic labor struggle, with this latest bankruptcy taking on a distinctly strategic flavor. The idea is to dispense with labor obligations.

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Let's hope Stockton can use mediation to avoid bankruptcy

Justin Sullivan/Getty Images

STOCKTON, CA - APRIL 29: Cars drive through downtown Stockton April 29, 2008 in Stockton, California. As the nation continues to see widespread home loan foreclosures, Stockton, .California led the nation with the highest foreclosure rate. One out of every 30 homes in Stockton is in foreclosure, close to seven times the national average for a metro area in the U.S. (Photo by Justin Sullivan/Getty Images)

The town of Stockton is lurching toward a Chapter 9 municipal bankruptcy. But thanks to a law that Gov. Jerry Brown recently signed, before a California municipality can head to bankruptcy court, it needs to submit to mediation. What this means is that the city and its creditors sit down a less formal environment than a court of law and try to iron out a solution. Generally speaking, this means that bondholders (for example) will accept a "haircut" on debt up front, rather than fighting it out on court.

If a mediation can lead to a successful resolution, it can be a real boon for the city that's in trouble. Bankruptcy is expensive. The lawyers have to be paid and the whole process has to be financed so that the municipality can continue to operate while its litigating. We're talking tens of millions of dollars.

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Hostess bankruptcy: It's the trouble with Twinkies

Hostess Twinkies Celebrate 75th Anniversary

Tim Boyle/Getty Images

Four of the Twinkies that (ahem) drove Hostess Brands into a second bankruptcy since 2004.

Don't worry: the Twinkie supply won't dry up. Hostess Brands, however, is filing for Chapter 11 bankruptcy for the second time in the past decade. Last time around, it set a record for languishing in restructuring. And even though a bankruptcy double-dip is never a good thing, Hostess' investors have enough confidence in the ongoing strength of the Twinkie-and-Wonder Bread market to produce additional financing.

Hostess, like a lot of companies that have been around for a while, has both a debt and a legacy cost/union problem. Total debt is "more than $860 million," according the Wall Street Journal. The pension plan is underfunded by $2 billion and fairly complicated, to boot, covering far more than employees than actually work for Hostess. And the union contracts...well, Chapter 11 will provide the excuse to renegotiate them.

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