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News Maryland Sun Investigates

Alter Communications bidder would need 6 years to recoup money

It would take six years for the publisher of Washington Jewish Week to recoup the $1.26 million it bid to buy Alter Communications, based on Alter’s financial projections through 2017.

An affiliate of Rockville-based WJW Group LLC won the bankruptcy auction Monday for the assets of Alter, a family-operated company that’s been publishing the Baltimore Jewish Times for nearly a century.

The $1.26 million price tag is higher than many observers expected, including Alter’s CEO. The sale still has to be confirmed by the U.S. District Court bankruptcy judge – the hearing is Thursday.

If it is, what is WJW going to own? Thanks to the transparency of bankruptcy court we all have some idea.

At the bottom of this post are two documents: Alter’s projections from 2012 to 2017 (above) and Alter’s operating report for the month of December (below).

In the projections, you’ll notice that Alter’s existing management was forecasting modest operating income growth through 2017, but an uneven path of profitability for that same period.

In the December operating report, Alter reported income of $407,099 and expenses of $375,339. That resulted in a profit of $31,760 for the month. Alter racked up more than $523,000 in unpaid bills while operating under bankruptcy protection. But the company’s receivables – how much it is owed by customers and others – is high as well: $452,769.

These numbers don’t include how much Alter racked up in professional fees, which are probably mostly attorney fees. That number is another $300,000, the monthly report shows.

Update: Andrew Buerger, the CEO of Alter Communications, wrote to The Baltimore Sun today to point out some problems he had with this report. First, he noted that Alter's previous financial projections were "completely irrelevant" at this point in time, and the new buyer would own a company with "zero liabilities." Alter's earlier financial projections had several built-in costs that the new owner does not have to assume, according to Buerger. Also, legal fees were included in the December monthly operating report that listed expenses -- and those fees would be paid under the purchase price if the bankruptcy court confirms the sale.

Buerger also said he thought it was wrong that the Sun published a document filed with the U.S. bankruptcy court that includes the names of subscribers. The document is available to the public through the bankruptcy court filings.

AlterProjections (PDF)
AlterProjections (Text)

Alter Communications December operating report (PDF)
Alter Communications December operating report (Text)

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