Papers' reorg plan coming soon, despite 'precautionary' filing

Lawyers for Philadelphia Newspapers LLC (owner of the Daily News and Inquirer) have asked a Bankruptcy Court judge to extend until Oct. 30 the deadline for them to file a reorganization plan.

The plan had been due on Aug. 31, but the company lawyers, in a filing Tuesday night, said that the complexity of the reorganization might require more time.

However, sources said that the company was mandated to file for an extension because of the court's scheduling requirements and that it was precautionary. The reorganization plan will be filed shortly, sources said.

Meanwhile, the new judge assigned to the case, Stephen Raslavich, scheduled a status hearing on the case for Tuesday.

At the hearing, Raslavich will take up a motion by the newspapers' senior lenders to enforce a subpoena addressed to Republic First Bancorp and Philadelphia Newspapers' request to be allowed to pay fees and expenses to Republic First.

The senior lenders want to know how Republic First came to be the preferred short-term financier.

Republic First has agreed to provide up to $15 million in short-term financing while Philadelphia Newspapers is in bankruptcy.

In a separate filing Tuesday night, Philadelphia Newspapers' lawyers are asking the court's permission to approve the agreement - which they attached to the court filing - with Republic First.

A hearing on that matter is scheduled for Aug. 20.

The $15 million in short-term financing would be secured by the company's office building at 400 N. Broad St. and its Conshohocken printing plant, the filing said.

That same property is being used as collateral on a $295 million note from Citizens Bank and other senior lenders.

The senior lenders have said that their security interests in the two properties should take priority over anybody else's.

They have not responded to the newspapers' most recent filing on short-term financing.

Philadelphia Newspapers' court filing said that the company was unable to obtain short-term financing that was not secured by its Center City office building and Conshohocken printing plant. The filing said that any such financing offered by the senior lenders would not permit the company to develop its own reorganization plan.