Posted on Wed, Nov. 11, 2009
By Christopher K. Hepp
Philadelphia Newspapers L.L.C.'s senior lenders have asked a federal judge to halt a pending auction of the company while they appeal his ruling barring them from bidding the debt they are owed.
If the auction goes forward as planned next Wednesday and before the appeal is resolved, the lenders contend in documents filed late Tuesday, they "will thus have lost the opportunity to protect the value of their collateral," the company, which they pegged at $318 million.
The request was made to U.S. District Judge C. Eduardo Robreno, who ruled yesterday that the senior lenders - which include Angelo, Gordon & Co., the CIT Group, and Eaton Vance - did not have the right to bid their debt at the auction, a procedure known as credit bidding.
The auction is central to Philadelphia Newspapers' reorganization plan, which calls for paying the senior lenders about $67 million in cash and property to settle the $318 million in debt.
The auction is designed to see whether that figure represents a fair-market value for the company, which owns The Inquirer, the Philadelphia Daily News and Philly.com.
The company filed for Chapter 11 bankruptcy protection in February.
Contact staff writer Christopher K. Hepp at 215-854-2472 or chepp@phillynews.com.
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