Newspaper firm gets more time to repay loan

Philadelphia Newspapers L.L.C., the parent company of The Inquirer, has been granted a reprieve on tomorrow's deadline for the company to repay a $15 million loan that has kept it afloat while in bankruptcy.

The company, which also owns the Philadelphia Daily News and Philly.com, reached a last-minute accord today with its senior lenders, who agreed not to call in the loan now.

The agreement now calls for the loan to be paid by June 30, but lenders can call it in early if they give the newspaper company five days' notice. The notice would allow the company to take the matter before the court.

Still to be resolved is whether Chief Bankruptcy Judge Stephen Raslavich will permit the company to launch an investigation into an unauthorized-taping incident involving a representative of the senior lenders.

The company today had asked Raslavich for an expedited hearing on its request. Raslavich declined to set an accelerated hearing date.

The senior lenders include Angelo, Gordon & Co., CIT Group, and Citizens Bank.

The company contends its relationship with its debt-holders deteriorated markedly after Brian P. Tierney, chief executive officer of Philadelphia Newspapers and publisher of The Inquirer, found a representative of the senior lenders taping a meeting with company officials. It is illegal to tape a meeting without the consent of all present.

The senior lenders have dismissed the incident as a minor faux pas that has had no bearing on their actions since.

In a related matter, the senior lenders asked the U.S. Court of Appeals for the Third Circuit on Monday to reconsider a ruling that bars them from using their debt to bid for the company when it comes up for auction April 27.

Despite that appeal, the auction is expected to go off as scheduled.

The auction is central to the company's reorganization plan, which would pay senior lenders about $67 million in cash and property to settle about $318 million in debt.