A Delaware judge has told lawyers for the feuding owners of the Philadelphia Inquirer and Daily News to write him short memos explaining what they want, and he’ll start planning a way to resolve this nasty company divorce. It’s clear the papers are headed toward new ownership, but they won’t likely get it before April, when Inquirer editor Bill Marimow’s contract expires.
Reporters were permitted to listen in on a conference call Delaware Chancery Court Judge Donald Parsons held with attorneys in the dispute Thursday morning. It was the first time I’d checked in on the warring parties in a while. I’d spent many hours in a Philadelphia courtroom watching the owners and their lawyers snarl, testify, argue, and share poisonous emails establishing their own virtue and their opponents’ perfidy.
That was when they were fighting over whether fired Inquirer editor Bill Marimow would get his job back. He did, but now the owners, in accord that they can’t coexist, are engaged in a more existential battle: who will control the papers and Philly.com once the current company is dissolved.
The Lewis Katz/Gerry Lenfest faction wants an open auction of the company, in which current owners and anyone else can bid. The George Norcross faction wants a closed auction, limited to the current five owners.
What can we expect?
The owners have now added blue-chip Delaware lawyers to their teams, since that’s where the company is registered and thus where the case will be heard.
The sparring in the conference call was interesting. Norcross’s attorney, Clarkson Collins suggested the two sides submit memos to the judge outlining their positions and exactly what kind of auction they envision. Katz/Lenfest attorney C.J. Seitz emphasized the need for a hearing, at which experts would testify as to the best approach.
At one point another attorney for the Norcross side, Robert Heim, said the current agreement among the owners “points to the need for a closed auction.”
It seems clear that Judge Parsons wants to move expeditiously to a resolution, but it seems unlikely the company will get new owners before April, when Marimow’s contract ends.
An interesting question will be to what extent either side offers, and whether the court considers, arguments that their plans will best serve the needs of the public, as opposed to the economic interests of the shareholders.
It will also be interesting to see whether one or both sides have some new investors in the wings to come in on their side of the conflict.
Judge Parsons said he wants a short (say, eight-page) exposition of each side’s views by next Wednesday.