Australian media company Nine Entertainment was resolved to shut the doors of Stuff if it couldn't sell what it called a "failing firm" by the middle of last year.
After High Court documents were unredacted today, it can now be reported Nine's board would have closed the Kiwi firm if a sale couldn't be concluded by May 31 - following the onset of the Covid-19 pandemic and an associated decline in Stuff's advertising revenues.
Stuff, which also publishes several New Zealand newspapers, was ultimately sold by Nine for a nominal $1 to Stuff's chief executive Sinead Boucher. It ended years of speculation about the company's ownership and unsuccessful attempts by NZ Herald publisher NZME to buy or merge with the firm, which had been supported by former deputy prime minister Winston Peters and Act Party leader David Seymour.
From September 2019 until May 2020, NZME and Nine had been in discussions over a possible sale with the parties working on a transaction structure which would have required NZME to obtain government support to hold a "Kiwi Share" in Stuff.
The aim was to allow editorial functions of the two entities to be kept separate, hopefully allaying competition concerns which had been raised by the Commerce Commission, court documents read.
NZME and Stuff's former Australian owner Fairfax, which merged with Nine in 2018, had earlier sought clearance from the Commerce Commission to combine the New Zealand operations. The Commission declined to grant authorisation in May 2017, which was later upheld by both the High Court and Court of Appeal.
Nine, however, terminated negotiations with NZME in May 2020 when it received an indicative offer from Boucher, which did not require Commerce Commission approval.
NZME then unsuccessfully sought interim injunction orders from the High Court to try to enforce an exclusivity agreement with Nine, which it claimed had been breached.
But Justice Sarah Katz's May 18 judgment declined NZME's application and negotiations between Nine and Boucher progressed.
Justice Katz said allowing NZME to maintain exclusive due diligence may increase the risk of Stuff ceasing operations, leading to significant job losses and reducing competition in the media marketplace.
The publicly released version of Justice Katz's judgment had been redacted for reasons of commercial sensitivity, the judge ruled, because negotiations with Boucher were then at a "critical stage".
Also included in the redactions was Nine and NZME's characterisation of Stuff as a "failing firm" for the purposes of seeking Commerce Commission clearance for an acquisition.
Boucher has never subscribed to the "failing firm" argument and in an affidavit to the High Court said although the trajectory of Stuff's business has been declining in recent years it had remained generally profitable.
"Real livelihoods are at stake if confidential and sensitive information about Stuff's position gets into the public arena before Stuff has a real chance to start to reverse the negative financial impact of Covid-19, deliver on its new strategy and put the recent difficulties behind it," she said.
Stuff had initially sought permanent suppression of the redacted material, however, later acknowledged the commercial sensitivity of the information will decrease over time and sought suppression for a period of six to twelve months to finalise and start delivering a new business strategy.
Justice Katz's judgment and her reasons for the redactions had been ordered to be released on December 3 but were extended until today - due to the High Court registry being closed over summer - to cover a full six-month period.