Court sale of Philly newspapers collapses; creditors won’t close $139M sale amid labor strife

Court sale of Philly newspapers collapses

PHILADELPHIA — Philadelphia’s two major newspapers may soon go up for auction again after creditors failed to close on their $139 million purchase by Tuesday’s deadline.

Company lawyer Larry McMichael says talks are continuing past the noon deadline on the future of The Philadelphia Inquirer and Philadelphia Daily News. A 2 p.m. bankruptcy court hearing has been scheduled.

McMichael says the company has enough money to maintain normal operations until a sale is finalized.

The creditors outbid local philanthropists led by Philadelphia business mogul Raymond Perelman to win the marathon April auction.

Perelman tells the AP he will “probably” attend Tuesday’s court hearing. He says he can’t comment on whether he would mount another bid.

Creditors insisted on signing deals with the company’s 15 labor unions before closing the sale, but were thwarted by holdout drivers concerned about their Teamsters pension plan.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

PHILADELPHIA (AP) — A lawyer for Philadelphia’s two major newspapers says creditors won’t close as scheduled on the $139 million bankruptcy sale of the company.

Lawyer Larry McMichael tells The Associated Press that creditors told him they will miss the noon Tuesday deadline. Creditors’ lawyer did not immediately return messages seeking comment.

McMichael says The Philadelphia Inquirer and Philadelphia Daily News will continue to operate until another sale can be scheduled. He says the owners have enough money to publish the newspapers without interruption. They will be led by interim chief executive Joe Bondi.

The creditors said Monday they would not close the sale without a signed contract with the Teamsters union that represents delivery drivers. Drivers have balked at demands they leave their union’s pension plan.