Federal judge nixes credit bid for Philly newspapers

PHILADELPHIA (AP) — A judge says creditors trying to take over Philadelphia’s two major newspapers in a bankruptcy auction must bid in cash, not with the millions owed them.

The decision today overturns a bankruptcy court ruling that seemed likely to give The Philadelphia Inquirer and Philadelphia Daily News to creditors.

The company appealed in an effort to keep the newspapers in local hands at the scheduled auction next week.

U.S. District Judge Eduardo Robreno agreed the newspapers do not have to allow credit bidding.

A group of current and new investors has posted an opening bid of $37 million to buy the company.

That cash and the newspaper building, valued at $30 million, would go to secured creditors to settle about $300 million in debt.