Judge OKs Philly papers’ reorganization plan, clears path to emerge from bankruptcy protection
By APMonday, June 28, 2010
Judge OKs Philly papers’ reorganization plan
PHILADELPHIA — A judge has cleared the way for Philadelphia’s two major newspapers to emerge from bankruptcy protection, despite objections from pension officials.
Chief U.S. Bankruptcy Judge Stephen Raslavich ruled Monday that a reorganization plan filed with the court is in the best interest of creditors.
He says the new owners of The Philadelphia Inquirer and Philadelphia Daily News did not assume liability for employee pension funds when they won the papers at an auction in April.
Attorneys for the funds had contended there is an estimated $174 million “withdrawal liability” for ending contributions.
Local investors purchased the papers in 2006 for $515 million, but ran aground amid industrywide revenue declines. The creditors bought the papers for $139 million.
