Owners Fight Credit Bid In Philly Newspaper Sale

MARYCLAIRE DALE

PHILADELPHIA (AP) — The owners of Philadelphia's two major dailies are waging a late-stage battle to keep the newspapers from creditors in a looming bankruptcy auction.

Under a key ruling in the case, senior lenders have the right to use the $300 million owed them to win The Philadelphia Inquirer and Philadelphia Daily News at the Nov. 18 auction. That gives them enough clout to beat the opening $67 million bid posted by current and new investors.

However, the local owners went to court Tuesday to try to overturn the decision to allow "credit bidding." They argued that only cash bids should be allowed to ensure a level playing field.

At times, U.S. District Judge Eduardo C. Robreno seemed inclined to agree with them, but he did not immediately rule.

"Why would anybody bid if you have $300 million in your pocket?" Robreno asked a lawyer for the secured creditors, who include the Royal Bank of Scotland Group PLC and the CIT Group Inc., which itself filed for bankruptcy protection this week.