Federal Judge Rules In Favor Of Local Ownership

tierney-bobble-head1.jpgNEW YORK TIMES: The chief executive of the bankrupt Philadelphia newspapers won a major court victory on Monday, keeping alive his bid to maintain local control of the papers and keep a group of banks and private equity funds from taking control. The financial institutions, who are owed close to $300 million by the company that publishes The Philadelphia Inquirer and Daily News, had sought to make an auction bid that did not include a big cash component, relying instead on the debt they hold to determine the value of their offer – an action known as a credit bid. On Monday, the Federal Court of Appeals for the Third Circuit, in Philadelphia, ruled against them, saying that the law “contains no statutory right to credit bidding.” If the maneuver had been permitted, it almost certainly would have given the creditors ownership of the papers, as no one else had shown any interest in bidding nearly as much. MORE

INQUIRER: The auction is central to the company’s reorganization plan, which now calls for senior lenders to be paid about $67 million to settle about $318 million in debt. The auction would establish whether that, indeed, was a fair price for the company. With the ruling, the company is now set to be put up for auction April 27. MORE

[Artwork via JUST SNARKY]

Leave a Reply

Your email address will not be published. Required fields are marked *