Two of Aaron Kushner’s investors in Freedom Communications have filed for receivership over the company, an unsealed lawsuit revealed earlier this week. But a spokesperson from the company told TheWrap the action was without merit and called the claims “unfounded.”
“There is no basis for the appointment of a receiver for the land sale and the company is not considering filing for bankruptcy and will defend itself vigorously,” a spokesperson from Freedom Communications told TheWrap on Friday. “We are pleased that the court on Thursday determined the plaintiffs had not stated a colorable claim for the appointment of a receiver and rejected their motion to expedite.”
Law 360 reports two minority shareholders filed suit in Delaware Chancery Court, claiming Kushner’s company needs independent oversight due to Freedom being insolvent and mired by mismanagement.
Abbey Financial LLC and Old Colony 2012 Investment Fund LLC are the complaining investors, and have asked the court to fast-track a decision in part because of an impending sale of close to 15 acres of land near near the company’s Santa Ana, California headquarters. Freedom Communications placed the land up for sale in October. The company is reportedly seeking $45 million for the land.
Kushner stepped down as publisher of the Orange County Register in October as his company Freedom continues to try to carve out financial success in Southern California. Upon stepping down, he said he’d remain as CEO of Freedom Communications.
According to the media company’s statement on Friday, the “two shareholders are making meritless and unfounded claims against the Company in an attempt to have the Court appoint a receiver to prevent the Company from selling its Santa Ana land, which these two stockholders supported just one year ago.”
As TheWrap previously reported, the company shuttered sister publication the Los Angeles Register in September after just five months, cutting 29 staffers.