Philadelphia Newspapers' bid procedures OK'd; auction set for Sept. 23

By Lisa Kerner

Charlotte, N.C., Sept. 17 - Philadelphia Newspapers, LLC's assets will return to the auction block on Sept. 23 after the original asset purchase agreement expired, according to an attorney familiar with the case.

As previously reported, the court approved a sale of the company's assets to PN Purchaser Co. LLC and confirmed Philadelphia Newspapers' plan of reorganization in June.

The buyer failed to close the sale by Sept. 14 and the agreement was automatically terminated.

Under the amended bid procedures, the company said neither PN Purchaser nor the pre-bankruptcy secured lenders will have the right to credit bid for the assets.

Additionally, all qualified bidders must allow 2.3% of their common equity to be distributed to Philadelphia Newspapers' unsecured creditors under the amended plan.

Bids are due by 5 p.m. ET on Sept. 22. If one or more bids are received, an auction will be held on Sept. 23. A hearing on confirmation of the fifth amended plan will be held Sept. 30.

The minimum bid increment at the auction will be $100,000.

In connection with the proposed second auction, the company said it plans to solicit votes on a fifth amended plan, conduct an expedited confirmation hearing and emerge from bankruptcy as soon as possible.

Philadelphia Newspapers, based in Philadelphia, owns the Inquirer, the Philadelphia Daily News and Philly.com. The company filed for bankruptcy on Feb. 23, 2009, and its Chapter 11 case number is 09-11204.

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