DEJA VU: New Owners Miss Deadline To Close Sale Of Inky/DN, Both Papers To Go Up For Auction Again


HOUSTON CHRONICLE: Philadelphia’s two major newspapers may soon go up for auction again after creditors failed to close on their $139 million purchase by Tuesday’s deadline. An afternoon bankruptcy court hearing was scheduled to discuss the status of the company that operates The Philadelphia Inquirer and Philadelphia Daily News. “The deal did not close. The asset purchase agreement has expired,” company lawyer Larry McMichael told The Associated Press after the noon deadline. “Exactly what’s going to happen is still up in the air.” The company nonetheless has enough money to fund normal operations and continue publishing the newspapers until a sale is finalized, he said. MORE

NEWSPAPER GUILD OF GREATER PHILADELPHIA: This afternoon Bankruptcy Court Judge Stephen Raslavich ordered that a new auction for the Inquirer, Daily News and be held Sept. 23 in his courtroom. Philadelphia Media Network, with whom the Newspaper Guild and 14 other unions had ratified contracts, will be a bidder. Other bidders have yet to identify themselves. One change from the auction held in April will be that bids at the new auction will contain no contingencies that would obligate the new owners to bargain contracts with the unions in order to close.  This does not mean that a new owner would come in and replace all the unions with new workers, but it does mean that a lone union can no longer jeopardize thousands of jobs and the entire company by hijacking and derailing the closing process. A confirmation hearing is scheduled for Sept. 30 and closing on the new sale is scheduled for Oct. 12.     

PHILADELPHIA MEDIA HOLDINGS: We are disappointed to report that, despite all of our hard work, the anticipated closing of our sale to Philadelphia Media Network did not occur today and the purchase agreement has been terminated. We want to assure everyone that this development will merely delay our exit from bankruptcy and sale by a few weeks.  This will certainly not result in the liquidation of the company and we have sufficient cash to continue to meet operating expenses pending emergence from Chapter 11.   The company today filed an amended plan of reorganization establishing a new restructuring timeline with the goal of exiting from bankruptcy in mid October. During this period, there will be no changes in leadership.  Brian has asked me to continue as our interim Chief Executive Officer and Brian will continue to serve as Publisher of The Inquirer and Sole Managing Member of Philadelphia Media Holdings and will focus his efforts on the new auction process.

RELATED: The new auction will be open to any party that can meet the bidding requirements and wishes to purchase the company and will not be limited to those parties that participated in the April auction. Among the important changes in the amended plan is the elimination of the requirement that the winning bidder have collective bargaining agreements with each of our bargaining units in order to close. In fact, there will be almost no conditions to closing to ensure the success of this new process.

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