Newspapers to have new auction Sept. 23

September 14, 2010|By Christopher K. Hepp, INQUIRER STAFF WRITER
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  • GREG OSBERG, the CEO named to run the Daily News, Inquirer and Philly.com after senior lenders won them at a bankruptcy auction this week, said at a news conference yesterday that the new owners are assembling a board of directors - likely including local business leaders, academics and others - to which he will be answerable. "I'm not going to start with the cost-cutting mentality. I'm going to start with the growth side," he said. Osberg said he expects the sale to close in late May and hopes to complete contracts with the unions by the end of June.
  • GREG OSBERG, the CEO named to run the Daily News, Inquirer and Philly.com after senior lenders won them at a bankruptcy auction this week, said at a news conference yesterday that the new owners are assembling a board of directors - likely including local business leaders, academics and others - to which he will be answerable. "I'm not going to start with the cost-cutting mentality. I'm going to start with the growth side," he said. Osberg said he expects the sale to close in late May and hopes to complete contracts with the unions by the end of June.
  • GREG OSBERG, the CEO named to run the Daily News, Inquirer and Philly.com. (File)
  • Brian Tierney: Current CEO

The Philadelphia Inquirer and Daily News are up for sale again.

A federal bankruptcy judge ordered a new auction for the papers and the website, Philly.com, on Tuesday after prospective new owners of the media outlets failed to bring their deal to closing.

The order by Chief Bankruptcy Judge Stephen Raslavich terminated the purchase of the papers' parent company, Philadelphia Newspapers L.L.C., by a group of its senior lenders.

The deal collapsed because the prospective buyer, Philadelphia Media Network Inc., was unable to reach a contract agreement with one union, Teamsters Local 628, which represents the company's drivers.

"We are extremely disappointed," said Gregory Osberg, chief executive officer of Philadelphia Media Network. "It is a tremendous waste of time and money to have to redo the auction."

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John Laigaie, the president of Local 628, said his members were delighted that Philadelphia Media Network's purchase had fallen apart.

"The way they look at it, they now have another chance to fight another day," he said of his members.

Local 628 was the only one of 16 unions to not reach a contract agreement with Philadelphia Media Network.

The Newspaper Guild, which represents editorial employees at the papers, issued a harshly worded statement after the decision to hold another auction was announced, saying the drivers had jeopardized "thousands of jobs and the entire company by hijacking and derailing the closing process."

Raslavich scheduled the new auction for 10 a.m. Sept. 23. The sale will be in his courtroom in the Robert N.C. Nix Sr. Federal Building at Ninth and Market Streets. He said he expected the sale to be quick, with final closing by mid-October.

He said that one difference from the company's first auction, in April, would be the absence of a provision to allow the successful bidder to walk away from the sale if it could not reach contract agreements with the company's unions.

The recent sale of the company collapsed because there was such a provision.

The prospective new owners, operating as Philadelphia Media Network Inc., bought Philadelphia Newspapers L.L.C. at the April auction for $139 million.

Philadelphia Media Network included many of the company's largest creditors, including Angelo, Gordon & Co.; Credit Suisse, and the Alden Capital Group. As a group, the creditors were owed $318 million.

Fred S. Hodara, lead attorney for Philadelphia Media Network, said his clients intended to bid for the company at the coming auction.

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