Print
E-mail
Philadelphia Newspapers, Creditors In DIP Loan Talks
By JOHN P. CONNOLLY, The Bulletin
A hearing in the Philadelphia Newspapers bankruptcy case regarding a $15 million loan was scheduled to occur on Friday, according to filings in the case.
The company operates the Philadelphia Inquirer, and has requested a debtor-in-possession (DIP) loan that lawyers said is needed before August 31. Creditors and debtors have hotly contested the loan, which totals $15 million acquired from Republic First Bank. Bankruptcy Judge Stephen Raslavich gave permission for the sides to enter mediated talks last week, and extended that time to Friday.
Creditors want to finance their own option for a DIP loan to the company, but their loan has a provision ensuring creditors a veto of whatever bankruptcy plan the company files.
A hearing was also scheduled on Friday to address the company's request for more cash to pay fees to Republic First for due diligence on the DIP. Judge Raslavich capped those fees at $100,000, and the company wants that limit extended to $200,000.
The company, which filed for bankruptcy in February, filed a plan to exit bankruptcy last week. The plan would give secured creditors about 22 cents for every dollar they are owed, and would not give those creditors any future equity in the company. Drawing upon the money of a group of local investors headed by housing magnate Bruce Toll and the Carpenter's Union, company management hopes to continue operating with fresh capital and almost no debt.
The deal would also give secured creditors ownership of the company's Broad Street tower which the company failed to sell last summer. Unsecured lenders would get even less out of the deal, a 3 percent equity share in the new company or a tiny cash payment.
"Today, Philadelphians once again stepped up in a big way," said Brian Tierney, CEO of Philadelphia Newspapers when the plan was filed. "Local ownership is critical because it has led to a new era of journalistic excellence, more readers than ever, greater support for our local community and a [number one] ranking in national advertising growth."
Mr. Tierney has been under fire from creditors, who do not want to agree to a plan that would guarantee that Mr. Tierney stays in control of the company. Under Mr. Tierney's management, the Philadelphia Inquirer's circulation has dropped 45,000 copies this year from 334,000 to just over 288,000.
Mr. Tierney has emphasized that the company's plan has merit because it brings new equity into the company, but creditors have not been very happy with a plan that requires them to slash hundreds of millions in debt without any equity going forward.
The local Newspaper Guild agreed to a 30-day contract extension with the company this week, a last-minute arrangement before the contract expired after August 31. The Guild has expressed frustration that the company has refused to begin negotiations with unions for months, and was the lone union not to agree initially to a month-to-month contract extension. Creditors are hoping the bankruptcy court gives them permission to open their own negotiations with the Guild.
John P. Connolly can be reached at jconnolly@thebulletin.us
The company operates the Philadelphia Inquirer, and has requested a debtor-in-possession (DIP) loan that lawyers said is needed before August 31. Creditors and debtors have hotly contested the loan, which totals $15 million acquired from Republic First Bank. Bankruptcy Judge Stephen Raslavich gave permission for the sides to enter mediated talks last week, and extended that time to Friday.
Creditors want to finance their own option for a DIP loan to the company, but their loan has a provision ensuring creditors a veto of whatever bankruptcy plan the company files.
A hearing was also scheduled on Friday to address the company's request for more cash to pay fees to Republic First for due diligence on the DIP. Judge Raslavich capped those fees at $100,000, and the company wants that limit extended to $200,000.
The company, which filed for bankruptcy in February, filed a plan to exit bankruptcy last week. The plan would give secured creditors about 22 cents for every dollar they are owed, and would not give those creditors any future equity in the company. Drawing upon the money of a group of local investors headed by housing magnate Bruce Toll and the Carpenter's Union, company management hopes to continue operating with fresh capital and almost no debt.
The deal would also give secured creditors ownership of the company's Broad Street tower which the company failed to sell last summer. Unsecured lenders would get even less out of the deal, a 3 percent equity share in the new company or a tiny cash payment.
"Today, Philadelphians once again stepped up in a big way," said Brian Tierney, CEO of Philadelphia Newspapers when the plan was filed. "Local ownership is critical because it has led to a new era of journalistic excellence, more readers than ever, greater support for our local community and a [number one] ranking in national advertising growth."
Mr. Tierney has been under fire from creditors, who do not want to agree to a plan that would guarantee that Mr. Tierney stays in control of the company. Under Mr. Tierney's management, the Philadelphia Inquirer's circulation has dropped 45,000 copies this year from 334,000 to just over 288,000.
Mr. Tierney has emphasized that the company's plan has merit because it brings new equity into the company, but creditors have not been very happy with a plan that requires them to slash hundreds of millions in debt without any equity going forward.
The local Newspaper Guild agreed to a 30-day contract extension with the company this week, a last-minute arrangement before the contract expired after August 31. The Guild has expressed frustration that the company has refused to begin negotiations with unions for months, and was the lone union not to agree initially to a month-to-month contract extension. Creditors are hoping the bankruptcy court gives them permission to open their own negotiations with the Guild.
John P. Connolly can be reached at jconnolly@thebulletin.us
 |
 |
|
| Philly, Despite High Tax Burden, Poised To Raise Sales Tax | Higher Cancer Rates In Under-18 Cell Phone Users |
Reader Comments
The following are comments from the readers. In no way do they represent the view of thebulletin.us.
You must register with a valid email to post comments. Only your Member ID will be posted with the comments.
Registered users sign in here: |
Become a Registered User |
