The Philadelphia Inquirer and Daily News took a big step toward exiting bankruptcy Thursday, when a federal judge approved the reorganization plan of the newspapers' parent company.
Chief Bankruptcy Judge Stephen Raslavich approved the plan that calls for Philadelphia Newspapers L.L.C., which owns the papers and the website Philly.com, to be sold to the company's senior lenders for about $139 million.
The senior lenders, a collection of about 30 financial institutions, are to settle on the sale by Oct. 8. The debtholders include Angelo, Gordon & Co., Credit Suisse, and Alden Global Capital.
Philadelphia Newspapers filed for Chapter 11 bankruptcy in February 2009.
After Thursday's hearing, the company's prospective new owner, Philadelphia Media Network, said it had reached an understanding with the company's mailers, the unionized workers who bundle the papers for delivery, and were backing away from a threat to close the publications if there were labor problems going forward.
Fred S. Hodara, lead attorney for the new owner, said the union had assured Philadelphia Media Network that it had no intention of striking should it not have a contract agreement by the time the sale closes.