An auction for the bankrupt Philadelphia Inquirer and its sister newspaper opened with an $85 million bid today from philanthropist Raymond Perelman that a judge will weigh against a $105 million offer from lenders.
Perelman attorney J. Gregory Milmoe said in an interview that his client doesn’t plan to raise his bid, which was made along with the Philadelphia Carpenters Union pension fund. Perelman, a Philadelphia local, is the father of billionaire Ronald Perelman.
Philadelphia Newspapers LLC, which owns the Inquirer and the Philadelphia Daily News, doesn’t have an opinion on which offer is better, company managing member Brian Tierney said in an interview during a break in today’s hearing.
“We don’t have a position,” said Tierney, who is also the publisher of the Inquirer.
U.S. Bankruptcy Judge Stephen Raslavich will make the final decision on the winner. Tierney said Raslavich can consider how each offer handles employment and other issues in addition to comparing the price.
The auction is the second this year for the Inquirer and the Daily News. It began nine days after the newspapers’ main lenders backed out of their contract to buy the publications for $139 million. Those lenders, including hedge fund operator Angelo Gordon & Co. and a unit of Credit Suisse Group AG, returned with an offer that is similar to their original deal, Tierney said.
The auction is being held in U.S. Bankruptcy Court in Philadelphia. After the two bids were announced, Raslavich began meeting with each group separately in his chambers.
Philadelphia Newspapers filed for bankruptcy in February 2009, blaming the recession and a drop in advertising.
The filing came more than two years after Tierney and a group of local investors, including the Carpenters Union pension fund, bought the company. In court papers, Philadelphia Newspapers listed assets and debt of as much as $500 million each.
The Inquirer, founded in 1829, is the third-oldest daily newspaper in the U.S. and has won at least 18 Pulitzer Prizes. The Daily News, a tabloid founded in 1925, won a Pulitzer Prize this year for investigative journalism. The two newspapers have had a common owner since 1969, when they were bought by Knight Newspapers Inc.
The case is In re Philadelphia Newspapers LLC, 09-11204, U.S. Bankruptcy Court, Eastern District of Pennsylvania (Philadelphia).