Philadelphia Inquirer Buyer Said to Cancel Purchase, Forcing New Auction
A deal to sell the Philadelphia Inquirer newspaper fell apart because of a dispute with the Teamsters union, forcing the bankrupt publisher to hold a new auction, a person familiar with the standoff said today.
Philadelphia Newspapers LLC, the company that controls the Inquirer and the Philadelphia Daily News, will file court papers this afternoon seeking a new auction, said the person, who declined to be identified because the plan isn’t yet public.
Under the company’s plan to exit bankruptcy, a group of the newspapers’ lenders, including hedge fund Angelo Gordon & Co. and a unit of Credit Suisse Group AG, has until noon today to complete the purchase of the company.
The sale collapsed after Teamsters members refused to agree to change their pension plan, the person said. Under the contract to buy the newspapers, the lenders had the option to back out if they failed to win support from all of the unions.
Frank Sabatino, a lawyer for the Teamster Pension Trust Fund of Philadelphia & Vicinity, didn’t immediately return a call for comment.
The newspaper company filed bankruptcy in February 2009, blaming the recession and a slowdown in advertising.
The case is In re Philadelphia Newspapers LLC, 09-11204, U.S. Bankruptcy Court, Eastern District of Pennsylvania (Philadelphia).