The winning bidder didn’t change the second time that a US Bankruptcy Court auctioned the Philadelphia Inquirer and Daily News, but the price did. The senior lenders of Philadelphia Newspapers LLC are back on track to become the new owners.
After a contract deadlock with the Teamsters Union local representing the newspaper company’s drivers brought down the original deal to have the lenders buy the company out of bankruptcy, the lenders came back and bid again at Thursday’s court auction. But instead of bidding $139 million they bid only $105 million. That was still good enough to beat the only other bidder, a partnership of local businessman Raymond Perelman and the Carpenters Union pension fund, which offered $85 million.
What remains to be seen is how the senior lenders – including Angelo, Gordon & Co., Alden Global Capital and Credit Suisse – will deal with the Teamsters Union this time around. Teamsters Local 628 was the only one of 16 unions which failed to come to terms with Philadelphia Media Network, the official name of the buying group, on a new contract.
According to the Inquirer, both Philadelphia Media Network and the Teamsters Local president said they plan to begin new contract talks. The new deal approved by the bankruptcy court does not require the buyer to employ the drivers, nor does it allow the buyer to walk away if it can’t come to terms with the union.