Following its sale to Digital First Media this spring, the Boston Herald’s former parent company appeared to be on track for a relatively smooth path out of bankruptcy — until a judge started asking questions about proposed legal protections for the newspaper’s reporters and editors, according to a Debtwire opinion published by Forbes. Bankruptcy lawyers appeared in court to request approval of a chapter 11 plan that would wind down the remaining shell company, HMH Media, and distribute proceeds of the Digital First sale to creditors. The proposed plan faces no substantial opposition from creditors, and has the support of unions and pension funds. Like many bankruptcy exit plans, the Herald’s includes a provision that effectively shields individuals who could face future legal action related to the company and activity surrounding its bankruptcy. These protections are often included in bankruptcy plans for the benefit of former and current executives of the company, but the Herald’s former parent wants to use what lawyers called “content releases” to protect its editorial staff too, specifically from potential defamation claims that could someday be filed in response to articles published before the sale to the new owner. The editorial staff should be allowed these releases in light of the “inherent risk” of defamation claims that comes with being a member of the media, as well as the protections afforded by the First Amendment. However, the judge overseeing the case has her reservations. Judge Laurie Selber Silverstein, who weighed in on plan releases as recently as October, said those protections would be more appropriate in the form of an insurance policy indemnifying the journalists in the event of such legal action. <em>Herald</em> publisher and former owner Patrick Purcell testified in court that it has such a policy — but it comes with a $1 million deductible.
