The key topic in Monday's hearing is the company's request to boost the amount of money it can use to pay critical vendors by $500,000, to $1.15 million.
The company told the court Wednesday that it needed the extra money because it had issued $500,000 of checks to vendors that either had not been cashed by Feb. 22, when the bankruptcy filing occurred, or had bounced.
Critical vendors include newspaper carriers, circulation sales contractors, freelance writers, and consultants, the company said. Some expense reimbursement checks also bounced.
A more delicate issue was put off for a week.
A court document filed late Thursday said the company and its senior secured lenders had started discussions on resolving their disputes over a loan to get the company through bankruptcy.
Senior creditors had offered a $20 million lifeline as part of a prepackaged bankruptcy proposal, which likely would have given creditors control of the company.
Instead, chief executive officer Brian P. Tierney and his backers lined up a $25 million loan - known as debtor-in-possession financing - from a different group that included Philadelphia Newspapers chairman Bruce Toll. It included a provision that would put the loan in default if Tierney left the company.
Debtor-in-possession financing is the first loan to be repaid when a company exits bankruptcy, so the senior lenders objected to the proposal led by Toll.
Contact staff writer Harold Brubaker at 215-854-4651 or hbrubaker@phillynews.com.
