Updated Sept. 14, 2010
A deal to sell the Philadelphia Inquirer newspaper fell apart after members of the Teamsters union refused to agree to change their pension plan.
The collapse of the deal is forcing the Inquirer’s publisher — Philadelphia Newspapers LLC, which is operating under Chapter 11 bankruptcy protection — to put itself up for auction.
Philadelphia Newspapers, which also controls the Philadelphia Daily News, is negotiating with the group of lenders, including Angelo Gordon and Credit Suisse, which backed out of a contract to buy the newspapers, Lawrence G. McMichael, a lawyer for the company, said in an interview. The deadline under the bankruptcy plan for a deal to purchase the company was Sept. 14; the lenders had the option to back out if they failed to win support from all of the unions.
The company can continue to operate because it has enough cash and is approaching the busiest time for advertising sales in the newspaper industry, Mr. McMichael said.
“I don’t know what we’re going to do,” said Mr. McMichael, with the law firm of Dilworth Paxson. Fred Hodara, an attorney for the lenders, declined to comment.
Frank Sabatino, a lawyer for the $1.4 billion Teamster Pension Trust Fund of Philadelphia & Vicinity, didn’t immediately return a call for comment.
The newspaper company filed for Chapter 11 in February 2009, blaming the recession and a slowdown in advertising.