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| The Inquirer building stands in front of One Liberty Place on the Philadelphia skyline. (George Widman/Associated Press) |
Inky Reschedules Financing Hearing Again,
Operates On Budget Showing Weekly $3M Loss
By John P. Connolly, The Bulletin
In a last-minute motion submitted to the U.S. Bankruptcy Court of Eastern Pennsylvania, Philadelphia Newspapers LLC, the company that operates The Philadelphia Inquirer and Daily News, has rescheduled its refinancing hearing until April 13.
The change in schedule moves back the hearing for the company’s Debtor In Possession (DIP) financing, a hearing that was initially supposed to be held weeks ago.
DIP is a special form of financing granted to companies in financial distress. It usually takes seniority over other debt, and places restructuring requirements on the debtor. At the initial bankruptcy hearing, the debtors and the creditors disagreed over the structure and amount of DIP that Philadelphia Newspapers requires.
Philadelphia Newspapers has not filed for a new cash collateral budget past the week ending on March 27. Until a motion for a new budget is filed, the company will continue on its most recently submitted budget, which shows the newspapers with negative cash flow of $3 million per week, not including payments to union health-care funds.
According to the most recent budget, Philadelphia Newspapers had $6.4 million in cash as of March 27. If they continue to operate at their current rate, that cash will be depleted by April 13, the day that the company has scheduled for a hearing on its new financing.
On March 17, lawyers for Philadelphia Newspapers said that the company would need its DIP financing before the end of April.
On April 6, the court will hold a hearing on Philadelphia Newspapers’ request for automatic stay, which temporarily protects debtors from lawsuits. Philadelphia Newspapers has requested this protection for publisher Brian Tierney, Philadelphia Media Holdings, as well as certain reporters, editors or other employees not originally included in the bankruptcy filing.
Philadelphia Newspapers has not yet filed a schedule of assets and liabilities to the bankruptcy court.
John P. Connolly can be reached at jconnolly@thebulletin.us
The change in schedule moves back the hearing for the company’s Debtor In Possession (DIP) financing, a hearing that was initially supposed to be held weeks ago.
DIP is a special form of financing granted to companies in financial distress. It usually takes seniority over other debt, and places restructuring requirements on the debtor. At the initial bankruptcy hearing, the debtors and the creditors disagreed over the structure and amount of DIP that Philadelphia Newspapers requires.
Philadelphia Newspapers has not filed for a new cash collateral budget past the week ending on March 27. Until a motion for a new budget is filed, the company will continue on its most recently submitted budget, which shows the newspapers with negative cash flow of $3 million per week, not including payments to union health-care funds.
According to the most recent budget, Philadelphia Newspapers had $6.4 million in cash as of March 27. If they continue to operate at their current rate, that cash will be depleted by April 13, the day that the company has scheduled for a hearing on its new financing.
On March 17, lawyers for Philadelphia Newspapers said that the company would need its DIP financing before the end of April.
On April 6, the court will hold a hearing on Philadelphia Newspapers’ request for automatic stay, which temporarily protects debtors from lawsuits. Philadelphia Newspapers has requested this protection for publisher Brian Tierney, Philadelphia Media Holdings, as well as certain reporters, editors or other employees not originally included in the bankruptcy filing.
Philadelphia Newspapers has not yet filed a schedule of assets and liabilities to the bankruptcy court.
John P. Connolly can be reached at jconnolly@thebulletin.us
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