Judge Blocks Boston Globe Sale Due To Class Action Lawsuit

Judge Blocks Boston Globe Sale Due To Class Action Lawsuit

By Dominic Rivera

Judge Shannon Frison has issued a temporary restraining order that prevents the $70 million sale of the The Boston Globe because of concerns that newspaper carriers might not be able to collect a class action lawsuit settlement from Worcester Telegram & Gazette, a Globe subsidiary.

In August this year, The New York Times, owner of The Boston Globe, agreed to to sell the newspaper and its other New England Media Group properties to John W. Henry, the principal owner of the Boston Red Sox. The sale price may have to be put into an escrow account now that there is a restraining order.

Aside from The Boston Globe, the deal also includes BostonGlobe.com, Boston.com, the Worcester Telegram & Gazette, Telegram.com, Globe Direct, and The Times‘ 49 percent interest in Metro Boston.

In a class action lawsuit filed in 2009, newspaper carriers argued that they work as employees of the newspaper but were misclassified as independent contractors, making them ineligible for benefits.

The judge said that newspaper carriers would suffer irreparable harm if the sale of Worcester Telegram & Gazette pushes through without any money set aside to pay a judgment.

Early this week, The Times requested the court to lift the order so that the sale could proceed, in exchange to setting aside money, to pay for future settlement. However, The Times was not willing  to assume any liability in the suit, which is one of the judge’s condition for the sale to proceed.

Reports are placing the maximum amount of a possible judgment for the newspaper carriers near $60 million.

The judge also ordered The New York Times Co., Henry, Boston Globe and the Telegram & Gazette to turn over all financial documents related to the sale.

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