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A Massachusetts judge has temporarily blocked the sale of The Boston Globe and The Worcester Telegram & Gazette to Boston Red Sox owner John W. Henry.
Henry inked a deal for the papers with The New York Times Company for an estimated $70 million but Judge Shannon Frison of Superior Court in Worcester halted the sale, citing a potential complication with a pending class action lawsuit involving the Worcester newspaper and its delivery workers.
Newspaper legal drama reported by the newspaper parties -- très meta!
The temporary restraining order was issued due to a lawsuit by former mail carriers of The Telegram & Gazette, which along with The Globe is part of the New England Media Group that Henry is purchasing from The New York Times Co., reports The Associated Press.
The class action lawsuit -- which is now causing the sale drama -- was filed back in 2009, borne from an earlier case. The Telegram & Gazette carriers are arguing that they were misclassified as independent contractors and are owed compensation for unpaid benefits.
Judge Frison granted the temporary restraining order Friday, when the sale was supposed close, after the carriers' attorneys argued the sale could prevent their clients from being able to collect a settlement.
Frison's order would allow the sale to continue, but only under one condition (a condition The Times Company wasn't willing to accept): The Times Company would have to assume liability for the suit, reports The AP.
The Times' refusal to assume liability is understandable. To do so would be to effectively write a blank check of up to $60 million -- the maximum amount of a possible judgment for the carriers. According to The New York Times (so, y'know, take it with a grain of suspicious salt), the carriers' lawyers didn't even want to delay the sale -- they just wanted to make sure their clients would be able to collect on judgment.
The judge was offered a number of solutions, such as giving the plaintiffs access only to the Telegram's assets and not the Times' or Globe's (Ha, keep dreamin') or having the Times Company put the proceeds of the newspapers' sale into escrow to pay a future settlement with the carriers.
So far, Frison hasn't taken the bait but she's set to issue a decision on the restraining order this week.
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