Rival Inquirer owners make case on hearings in Phila.

Posted: February 05, 2014

A Philadelphia judge pressed attorneys for the estranged owners of The Inquirer on Monday to explain to her why she should not preside over its parent company's dissolution and sale.

"From my review of the statute, there is no reason you can't stay here to have it be decided," Common Pleas Court Judge Patricia McInerney said.

The hearing in City Hall was the first of consecutive days of proceedings to decide whether the legal battle between the company's managing partners, George E. Norcross III and Lewis Katz, will remain in Philadelphia or be in Delaware, where Interstate General Media is incorporated.

Whether McInerney was declaring an opinion or prodding the lawyers to make their arguments wasn't clear. Responding to her remark about the case's staying in Philadelphia, Richard Sprague, lead attorney for owners Katz and H.F. "Gerry" Lenfest, immediately said: "We're all in favor of that."

Robert Heim, the lead attorney for Norcross, William P. Hankowsky, and Joseph Buckelew, then began a delicate walk through his argument that the Delaware Court of Chancery was the better legal setting.

Though IGM's operations are in Philadelphia, the partnership was registered in Delaware, and the chancery court, Heim said, is best able to handle the "extensive and protracted" aspects of dissolving and auctioning IGM.

At one point, McInerney said to Heim, "You're not suggesting this court couldn't handle this, are you?"

Heim quickly replied, "Far be it from me to suggest that, your honor."

McInerney sided with Katz and Lenfest in November when she reinstated fired Inquirer editor William K. Marimow. A Dec. 18 ownership meeting did not yield a settlement, and there has been no indication of a resumption of talks. Next came parallel legal requests to dissolve the company. Katz and Lenfest prefer the Philadelphia court and a public auction. The Norcross group sued in Delaware and seeks a private auction.

Chancery Court Vice Chancellor Donald F. Parsons will hold his state's version of a jurisdictional hearing Tuesday in Wilmington.

Attorney Marc Sonnenfeld, who represents IGM, said after Monday's hearing that he expected the judges to talk after Tuesday's hearing and decide where the case would proceed.

Heim said judges are used to debates about jurisdiction. "The judge is very interested in the issue, and Vice Chancellor Parsons will be very interested in the issue, and we'll see where we wind up," Heim said. "Tomorrow, the arguments will be very similar to today."


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