Saturday, April 26, 2014
PHILADELPHIA (AP) — Philadelphia's two largest newspapers will be sold at an ascending-bid auction open only to insiders, a Delaware judge ruled Friday.
The decision is a victory for majority owner George Norcross in his fight for control of The Philadelphia Inquirer and Philadelphia Daily News.
Norcross and fellow investor Lewis Katz have been locked in a fight over how to run the company, prompting the troubled media company's latest sale.
Both men have pledged to open with a starting bid of $77 million, which would make their 2012 investing partners whole. In his order, Chancery Court Judge Donald Parsons Jr. set that starting bid, and ordered that the auction take place by May 28.
Katz had fought for the company to be sold at a sealed-bid auction open to anyone, arguing it would bring the highest price. Norcross' lawyers said a live, ascending-bid auction would allow the parties to continually evaluate whether to bid more for the company or cash out.
The company, which also operates the Philly.com website, is being sold for the fifth time since 2006.
Norcross and Katz led a small group of local investors who paid $55 million for it in 2012. However, they soon fought over business and newsroom decisions, including the tenure of Inquirer editor William Marimow. Norcross tried to fire him, but a Philadelphia judge returned Marimow to the job last fall. However, his contract expires next week.
Norcross, who favors "hyper-local" coverage, holds a 52 percent stake in the company, and his faction a 58 percent stake. Katz holds a 26 percent stake, and his ally, philanthropist H.F. "Gerry" Lenfest, holds a 16 percent stake.
However, Katz and Lenfest set up a two-man management committee that forces them to agree on key decisions. Instead, it led to the impasse.
Norcross is one of the most powerful figures in the Philadelphia-South Jersey region, with interests in media, health care, education, banking, insurance and politics.
Katz made his fortune investing in a parking empire and a sports TV network in New York City.