Judge sets rules for Philly newspapers auction next week; bidding to start at $50M

Judge: New Philly newspaper bids to start at $50M

PHILADELPHIA — A bankruptcy judge has set the ground rules for next week’s auction of Philadelphia’s two major newspapers.

The Philadelphia Inquirer and Philadelphia Daily News are back on the auction block because creditors this week walked away from a planned $139 million bankruptcy sale.

Potential buyers will need to offer at least $50 million and a minimum cash deposit of $7.5 million if they want to bid Thursday on the papers’ parent company.

Among other rules approved by the judge Friday, the company’s lenders will not be able to use the $318 million in debt they are owed to buy the papers.

The bank and hedge fund creditors who won the April auction say they will bid again.

Local investors bought the papers for $515 million in 2006.

Information from: The Philadelphia Inquirer, www.philly.com