Mirant protests MediaNews' termination of swap deal

By Jeff Pines

Washington, June 4 - Mirant Corp. wants MediaNews Group Inc. to pay up and be held in contempt for terminating a swap agreement with the Atlanta-based energy company. A hearing is scheduled for June 30 in the U.S. Bankruptcy Court for the Northern District of Texas.

Mirant said MediaNews terminated the deal by refusing to make a $700,000 payment after Mirant rejected MediaNews' $1 million exit offer. Mirant said the swap could be worth as much as $3 million to it. The swap agreement is between a subsidiary of Mirant and MediaNews.

MediaNews knew Mirant was in Chapter 11 and did not take any initial action, which is prevented anyway under bankruptcy law, the company said.

It took the position that Mirant's filing for Chapter 11 constituted a default ending the swap agreement two months after Mirant filed for bankruptcy, Mirant said.

Mirant wants a court order enforcing the swap agreement and damages.

The swap agreement does not mature until April 31, 2005.

Mirant filed for bankruptcy on July 14, 2003. Its Chapter 11 case number is 03-46590.

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