by KYW’s Steve Tawa
A federal court judge is considering an appeal of a bankruptcy court ruling that would allow lenders to take control of the company that owns the Philadelphia Inquirer and Daily News. The arguments centered on 'credit bidding'.
Lawyer Abid Qureshi, representing lenders, says the bankruptcy code gives them the right to 'credit bid' when the papers are put up for auction on November 18th -- by putting any amount -- up to the $311 million they're owed, without raising cash:
“Everybody is making a decision on what they believe these assets are worth, and what their market value is.”
Company lawyer Lawrence McMichael asked federal Judge Eduardo Robreno to overturn the bankruptcy-court ruling, saying using debt to bid is not the same currency as cash (see previous stories).
One creditor's lawyer told the court newspaper executive Brian Tierney was just trying to keep his own job, and help his inside local investors, by putting up a $35 million cash bid.
McMichael says it's not about motivation. He says the credit-bid argument is only a question of law:
“What does the statute mean? If it means what we think, we should win, and proceed with the auction as we plan to have it.”
Judge Robreno is expected to have a decision early next week.
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