The Canadian publisher had reached tentative agreement with management over the sale of the paper late on Wednesday. But the dollars 75m ( pounds 39.5m) deal included a clause calling for Mr Black to receive a dollars 1.5m 'break-up fee' to cover his expenses if he fails to reach agreement with unions on new labour contracts.
This clause has angered the unions, and was also viewed as unacceptable by a committee of creditors as the dollars 1.5m would come out of the pot of money available to them. A spokesman for the creditors said that the fee was not the only stumbling block, and that securing union approval remained the main hurdle for any bidder.
Lawyers for the various parties were back in the Lower Manhattan bankruptcy court yesterday, where Judge Tina Brozman extended the final deadline for a deal by an extra week to 17 August. She stressed the urgent need to rally behind a single bidder in order to save the newspaper. Representatives of the bidders and union leaders then dispersed into another round of meetings to try to reach agreement.
The 10 unions at the newspaper are being asked to go along with job cuts in order to keep the paper alive, and are divided over which of several bids to support. Some union leaders are openly opposing the sale of the paper to Mr Black.
Mr Black's rivals are Mort Zuckerman, the real estate developer and publisher who publishes US News and World Report, and a Long Island-based film company.
The News filed for Chapter 11 bankruptcy protection last December.Reuse content