The Inquirer and Philadelphia Daily News took large steps toward exiting bankruptcy Thursday when a federal judge approved a reorganization plan for the papers' parent company, Philadelphia Newspapers L.L.C.

The newspapers and the website, Philly.com, are now set to be in the hands of new owners - a collection of about 30 financial institutions - by no later than next Friday.

The prospect of a smooth transition also improved when the new owners announced after the hearing in U.S. Bankruptcy Court here that they had reached an accommodation with the mailers, a key company union. As a result, the new owners backed away from the threat of a day before to close the company if there were a strike by the mailers, workers who bundle the papers for delivery.

In all, the day offered the most certain sense yet that there would be a conclusion to a case that has meandered, seemingly without end, since Philadelphia Newspapers filed for bankruptcy in February 2009.

Chief Bankruptcy Judge Stephen Raslavich, acknowledging that rocky history, noted that even now "people will keep the cork in the champagne bottle.

"They might, however, put the bottle on ice," he added.

Under the plan confirmed by Raslavich, Philadelphia Newspapers will be turned over to its senior lenders, who won the company at auction last week for $139 million. Philadelphia Newspapers had been owned by a local investment group, headed by Brian P. Tierney, who served as its chief executive officer.

The money paid for the company goes right back to the lenders, who were owed $318 million by Philadelphia Newspapers. The lenders were required by the rules of the auction to bid in cash, despite the money they are owed.

The lenders include Angelo, Gordon & Co., Alden Global Capital, and Credit Suisse. The new company is called Philadelphia Media Network Inc. Its new chief executive officer will be Greg Osberg, and the chief operating officer will be Robert J. Hall, the onetime publisher of the newspapers.

The auction last week was actually the second for the company. The first was in April. The senior lenders won that bidding as well. In that auction, only 16 of the company's approximately 30 senior lenders took part in the purchase. This time, all did.

Under the original sale agreement, the buyers could walk away from the deal if they were unable to reach contract agreements with the company's 16 unions before closing.

Agreements were reached with all unions save the company's unionized drivers, represented by the Teamsters. That alone caused the sale to collapse.

The second auction was held with the winner required to close with or without contract agreements with the unions.

The new buyers are still trying to reach a contract agreement with the drivers. The two sides are expected to meet soon to resume negotiations.

A short-lived falling out with the mailers was resolved Thursday. But one day earlier, Philadelphia Media Network said the mailers had reneged on a contract agreement. The company said that it feared a strike and threatened to close its operations if there were.

The mailers cried foul and accused the new owners of twisting facts: A contract had not been rejected, but there was contract language to be negotiated, they said.

The standoff ended with a pledge by the mailers that they had no intention of striking, even if they did not have a final contract by the time Philadelphia Media Network closes on its deal.

Contact staff writer Christopher K. Hepp at 215-854-2208 or chepp@phillynews.com.