SEVERAL NEW investors, including members of Philadelphia's wealthy Perelman family, have surfaced for a bankruptcy auction today that will likely determine the future ownership of the Daily News and Inquirer.
But pending negotiations with the newspaper company's 4,000 unionized workers are already casting a long shadow over the auction, which will take place in the private offices of a law firm in Manhattan.
All three of the investor groups bidding for the newspapers have put labor contingencies into their bidding proposals, the company's top financial adviser disclosed yesterday at an auction-eve hearing in U.S. Bankruptcy Court.
Two of the bidders want to call their deals off - and recover their initial $3 million deposits - if they're unable to negotiate "an acceptable bargaining agreement" with each of the company's 14 unions, testified investment banker Marshall Sonenshine.
The third bidder - a group of hedge funds and other financial institutions that controls most of the company's debt - has included a bid condition that would force the current owners to terminate all 4,500 of its workers, union and nonunion, agreeing to rehire at least 51 percent, Sonenshine said, but allowing the new owners to vastly reduce the workforce.
"That's a declaration of war," responded John Laigaie, president of Teamsters Local 628, who sat through the hearing with 50 other Teamster drivers. "We understand tough business conditions and we understand the newspaper industry has changed. But . . . there's no way, if they attempt that, that there's not going to be a crippling strike."
An attorney for the lenders, Fred S. Hodara, declined to confirm or deny Sonenshine's description of the lenders' preliminary bid, but said the lenders were committed to meeting with union leaders when the auction is over and working out new, mutually-agreeable contracts.
Hodara accused the newspapers' current management, led by Chief Executive Officer Brian P. Tierney, of trying to poison relations between the unions and the lenders, with whom Tierney has been fighting bitterly since the bankruptcy proceedings began 14 months ago.
The hearing produced new details on the three groups who submitted $3 million deposits last Friday to join today's auction.
Businessman/philanthropist Raymond Perelman, 92, and his billionaire son Ronald, 67, were identified as new members of a local investment group initially recruited by Tierney to make a $52 million bid for the two daily newspapers and their Web site, Philly.com.
The other members of the local group include philanthropist David Haas, chairman of the William Penn Foundation, the pension fund of the Metropolitan Carpenters Union, businessman Bruce Toll and insurance broker William Graham.
"I'm a Philadelphian," Raymond Perelman said when reached last night at his Rittenhouse Square home. "I've been born and raised here, and I think both papers ought to be owned by local people."
As the Perelmans agreed to join the group, another participant dropped out - the Yucaipa Companies, a California holding company which agreed last week to provide financing after Gov. Rendell approached Yucaipa's chief executive, Ron Burkle, on Tierney's behalf.
Rendell told reporters yesterday that he had gotten involved to help save Pennsylvania jobs.
A New York investment firm known as Alden Capital was identified as a new member of the bidding entity put together by the newspapers' senior lenders. The entity also includes Angelo, Gordon & Co. and the CIT Group.
The third bidder is Stern Partners Inc. of Vancouver, Canada, a privately held investment firm that owns a controlling interest in the Winnipeg Free Press, the Brandon Sun and seven community newspapers in northwestern Canada. Other holdings include paper mills, a packaging company and a garden-products firm.
Raymond Perelman grew up in the Feltonville and Olney sections of the city.
After the University of Pennsylvania and World War II service, he went to work for his family business, American Paper Products, and began to amass a fortune buying properties and regional companies, including the 1960 purchase of Belmont Iron Works, the largest manufacturer of structural steel in the Northeast.
Perelman and his wife, Ruth, are philanthropic giants in Philadelphia, where they've given millions of dollars to arts, education and cultural institutions.
Their names grace several buildings around town.
Ronald Perelman built an even larger fortune acquiring struggling companies then reselling them for a profit.
He's been married and divorced four times, most recently from actress Ellen Barkin in 2006.
Ronald Perelman, who earned his M.B.A. from the Wharton School at Penn and now lives in New York, purchased candymaker MacAndrews & Forbes in 1980 for $45 million.
Among his many up-and-down investments are the Revlon Corp., Marvel Entertainment Group, Pantry Pride supermarkets and Technicolor.