Monday, March 22, 2010

Philly Newspaper Creditors Lose Appeal

Philadelphia Newspapers L.L.C., which owns The Inquirer, the Daily News and, can bar its senior lenders from using their debt to try to purchase the company at auction.

The 3rd Circuit Court of Appeals agreed, 2-1, with a lower-court ruling that the bankruptcy code requires only that the lenders receive the "indubitable equivalence" - or fair value - of their debt when the company is sold at auction, reported Christopher K. Hepp of the Inquirer.

The auction is central to the company's reorganization plan, which now calls for senior lenders to be paid about $67 million to settle about $318 million in debt. The auction would establish whether that, indeed, was a fair price for the company.

With the ruling, the company is now set to be put up for auction April 27.

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