Quick Pa. high court ruling sought in IGM dispute

Posted: March 06, 2014

The Pennsylvania Supreme Court should take the unusual step of immediately overturning a Philadelphia judge's decision that Delaware is the only place to settle the Inquirer ownership dispute, according to a request filed by one group of owners.

Not so - on several levels, the other group said Tuesday.

In a filing last week, attorneys for owners Lewis Katz and H.F. "Gerry" Lenfest argued that not only were their clients harmed by the "unfounded" opinion last month of Common Pleas Court Judge Patricia A. McInerney, but it "improperly deprives Pennsylvania citizens of their right to seek recourse in the local courts," and could have "far-reaching implications even beyond Pennsylvania."

Attorneys for owners George E. Norcross III, Joseph Buckelew and William P. Hankowsky replied Tuesday that McInerney's ruling was correct, and that this case has neither the public importance nor the likelihood of setting precedent that might warrant expedited review.

"Those overwrought assertions have no basis in fact," attorneys for the Norcross group wrote. "To the contrary, the lower court's interpretation of the applicable Delaware statute - a correct interpretation as a matter of law - is only binding on the parties in this dispute. Any court that finds the decision unpersuasive is free to disregard it."

Interstate General Media Holdings L.L.C. is the parent company of The Inquirer, the Philadelphia Daily News, and three websites. IGM operates mostly in Pennsylvania but is registered in Delaware, and the 2012 partnership agreement creating it used Delaware limited liability company laws.

The expedited request was prompted by a March 28 hearing, scheduled by Delaware Court of Chancery Vice Chancellor Donald F. Parsons, to discuss whether to use a public or private auction to dissolve IGM.

Parsons said he would not wait for the appeal by Katz and Lenfest to move through Pennsylvania courts, but would deal with conflicting court claims later if that situation arose.

McInerney's one-paragraph order declining to exercise jurisdiction was posted on Feb. 7 and her opinion on Feb. 18. The lawyers for Katz and Lenfest wrote that an appeal was warranted after reading the opinion because it said Delaware had "exclusive jurisdiction" to dissolve a limited liability corporation using Delaware law.

All the owners agree that dissolving IGM is best because the company is paralyzed by the dispute between Katz and Norcross, who together comprise the management committee that makes all major decisions for the company. Katz and Lenfest prefer a public auction of IGM assets, with qualified bidders submitting sealed bids. The Norcross group prefers a private auction among the current owners.



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