Judge calls for arguments on possible Inquirer auction

George E. Norcross III
George E. Norcross III
Posted: January 15, 2014

A Philadelphia judge on Monday told lawyers for the feuding owners of The Inquirer to submit written arguments over the next 10 days outlining why they believe the newspaper's parent company should be dissolved and sold at a private or public auction.

Common Pleas Court Judge Patricia A. McInerney's directive followed a brief hearing. It came as the union representing newsroom workers said it wanted to join the bidding for Interstate General Media. The Newspaper Guild said it had been contacted by an unnamed outside investor who was interested in "teaming with us" for a bid.

"Whichever side of the present ownership dispute you support, if you support any at all," Guild leaders told their members, "it is clear to everyone, including the owners, that what we have now isn't working and wasn't working when these owners came to us a year ago demanding $6 million in givebacks or they would sell the company."

The news was the latest twist in the battle for the company that bought The Inquirer, the Philadelphia Daily News, and Philly.com for $55 million in 2012.

The philanthropist Raymond Perelman said Monday that he was also still interested in buying IGM, but said he was not the Guild's partner.

"I would want sole ownership," Perelman said in an interview. "I don't want any partners. You see what's happened there. They don't get along."

McInerney called Monday's hearing to give IGM a chance to respond to the request of co-owners Lewis Katz and H.F. "Gerry" Lenfest to dissolve the company and have a court-appointed trustee conduct a public auction.

The other three owners - George E. Norcross III, William P. Hankowsky, and Joseph Buckelew - oppose Katz and Lenfest in the dispute. They have also filed a petition, in Delaware Chancery Court, to have IGM dissolved, but they want it sold in a private auction among the current owners.

The issue of which court decides the outcome remains contentious.

None of the owners attended the hearing at McInerney's City Hall courtroom. She directed lawyers for Katz and Lenfest to submit written arguments by Thursday. Attorneys for the Norcross-led faction will follow with filings by Jan. 22.

No hearings have been scheduled in Delaware.

Norcross and Katz constitute a two-man committee that must approve all major business decisions for the company. Both sides agree that the company is headed toward paralysis - or is already there - because of a Katz-Norcross "deadlock."

In court papers filed Friday, lawyers for Katz and Lenfest said IGM and its managing members were "unable to make important business decisions - including who The Inquirer's publisher and editor should be," and warn that "the resulting paralysis is threatening the viability of the enterprise."

In their Jan. 3 petition in Delaware, Norcross' attorneys wrote, "With litigation ongoing and the relationship between Katz and Norcross becoming increasingly acrimonious, they have shown themselves unable to resolve issues critical to IGM for the coming year."



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