Senior lenders win 2d auction for Phila. papers

The front of the Philadelphia Inquirer building at 400 N. Broad Street.
The front of the Philadelphia Inquirer building at 400 N. Broad Street. (Bob McGovern)
Posted: September 23, 2010

A coalition of Philadelphia Media Holdings L.L.C.'s largest debtholders has again won ownership of The Inquirer, the Daily News and Philly.com.

The group of senior lenders, 16 financial institutions including Angelo, Gordon & Co., Alden Global Capital and Credit Suisse, submitted the winning bid of $105 million in cash today at an auction conducted before Chief U.S. Bankruptcy Judge Stephen Raslavich here.

Once again, the senior lenders group outbid a challenge - it started at $50 million and then was increased to $85 million - by local investors Raymond Perelman, businessman and philanthropist, and the Carpenters Union pension fund.

The senior lenders first bought Philadelphia Media Holdings at a bankruptcy auction in April.

That sale - $139 million, including $105 million in cash - was nullified last week after the senior lenders reached new contracts with all but one of the papers' 16 labor unions.

The drivers, represented by the Teamsters, voted down a proposed pact in a pension-funding dispute.

Raslavich praised the parties for an auction that he said will preserve the company and the jobs of the company's workers.

The judge set a confirmation hearing for next Thursday.

The ownership showdown became clear Wednesday after the two groups emerged as the only bidders for the newspapers.

Both groups submitted initial bids by Wednesday's noon deadline. The minimum bid was $50 million.

Philadelphia Media Holdings filed for bankruptcy protection in February 2009, owing senior lenders $318 million.

The bankruptcy occurred almost three years after Center City public relations man Brian Tierney, backed by housing developer and auto dealer Bruce Toll and other investors, bought the papers and website for $515 million from McClatchy Newspapers, which acquired the Philadelphia papers when it bought out the former Knight-Ridder newspaper chain.

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