Philadelphia Inquirer Publisher Wins Court Permission to Exit Bankruptcy
The Philadelphia Inquirer and its sister publication won court permission to exit bankruptcy, one week after lenders won an auction for the newspapers.
U.S. Bankruptcy Judge Stephen Raslavich today approved the reorganization plan of Philadelphia Newspapers LLC, owner of the Inquirer and Philadelphia Daily News. The approval in Philadelphia was the last major court ruling lenders needed to complete the purchase. They aim to resolve a dispute with the Teamsters union before taking ownership by Oct. 8, Fred Hodara, an attorney for the lenders, said in an interview.
“I presume after all that has happened people will keep the corks in their champagne bottles at this juncture,” Raslavich said in court.
The plan was the second Raslavich approved that includes a sale to lenders. The previous sale was canceled by the lenders just before it was set to close because the Teamsters refused to sign a new contract that replaced their pensions with a 401(k) plan.
The other 15 newspaper unions agreed to new contracts that include concessions designed to save the company money, Hodara said. The lenders won a Sept. 23 auction for the newspapers with an offer of $105 million, outbidding Raymond Perelman, father of billionaire Ronald Perelman.
Earlier this week, the lenders were concerned that a union for mailers might not honor the new contract, Hodara said. The head of the union then sent the lenders a letter saying his group intended to honor the agreement, Hodara said. The mailers earlier voted in favor of the new contract.
Philadelphia Newspapers filed for bankruptcy in February 2009, blaming the recession and a decline in advertising. The filing came more than two years after public relations executive Brian Tierney and local investors including the Carpenters Union pension fund bought the company.
Philadelphia Newspapers listed assets and debt of as much as $500 million each in court papers.
The case is In re Philadelphia Newspapers LLC, 09-11204, U.S. Bankruptcy Court, Eastern District of Pennsylvania (Philadelphia).
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