Bankruptcy judge says unsecured creditors’ lawyers should investigate taping

U.S. Bankruptcy Judge Jean K. FitzSimon today said a Pittsburgh law firm representing unsecured creditors of Philadelphia Newspapers L.L.C. should investigate an alleged unauthorized recording of a November meeting between company officials and other lenders.

The decision that Eckert Seamans Cherin & Mellott L.L.C. should undertake the investigation went against a request by Philadelphia Newspapers - publisher of The Inquirer, the Philadelphia Daily News and Philly.com - that the law firm Elliott, Greenleaf & Siedzikowski P.C., of Blue Bell, be hired to investigate.

It also came over the objections of the senior secured creditors, including New York financial firms CIT Group and Angelo, Gordon & Co., which hold nearly $278.5 million of the company's debt, according to the most recent court filings.

Eckert Seamans already represents unsecured creditors in the bankruptcy case, including vendors such as paper suppliers and other debt holders whose claims are weaker than those of the senior lenders.

Lawyers for the senior lenders, who have the strongest claim on Philadelphia Newspapers' assets, had argued that an investigation was not warranted and would be a waste of money.

The judge sided with Eckert Seamans, which had argued in a filing last week and in court today, that such an investigation fell within its duties as counsel for the unsecured creditors.

"I would like the debtors and the creditors to focus on getting this case moving forward," FitzSimon said.