Philadelphia newspapers go up for auction

Three bidders are vying for Philadelphia’s two daily papers and the online version of the papers today.

Three bidders are vying for Philadelphia’s two daily papers and the online version of the papers today.

One bidder includes a group of local investors connected with the current publisher Brian Tierney. A group of secured creditors who are owed more than $300 million are also seeking to take over the papers. And the third bid comes from a Canadian company.

This auction will not sound like your average cattle auction.

Instead, the newspapers’ fate will be decided in a staid New York law firm. The bidders will start out in the same room but may then be moved to different offices as those running the auction try to get each party to out-bid the others.

Bankruptcy attorney Joe Dworetsky says each group will have their legal advisors and financial personnel hunched over laptops, crunching numbers.

“They’re in for a long day,” says Dworetsky, “where they’ll at times work furiously to increase their price, but at times they’ll be sitting around waiting to hear the next bit of news.”

And the prize may not necessarily go to the highest bidder. The rules provide for an award to the “highest and best” offer, permitting consideration of factors like local ownership. Dworetsky says that could lead to further legal challenges. Either way, a bankruptcy judge will have to approve the deal.