PHILADELPHIA (AP) – The new year has brought little peace among the warring owners of Philadelphia’s two largest newspapers.
Majority owner George Norcross accused his partner Friday of proposing a public auction that could send The Philadelphia Inquirer and Philadelphia Daily News into bankruptcy for the second time in five years. Norcross, in his own petition, accused rival owner Lewis Katz of rejecting a slew of proposed fixes over the past year, including a buyout of Katz’s shares.
“Your surprise decision to file a motion to dissolve the company risks not just the progress the company has made, but presents a real threat of another bankruptcy,” Norcross and fellow investor William Hankowsky said in a statement Friday.
Katz had brought the ownership feud into court – and public view – after the October firing of Editor Bill Marimow. After several days of hearings, a judge sided with Katz and returned Marimow to the Inquirer newsroom. However, the judge also affirmed the job status of Publisher Bob Hall, the Norcross ally who had fired Marimow.
That left the staff with feuding owners atop the enterprise and an editor working for a publisher who wants him out.
Katz and Norcross have been fighting for nearly a year, after their six-man investor group bought the company in early 2012.
“Both parties have recognized that there is an impasse that can’t continue,” Katz’s lawyer, Richard Sprague, said in a statement late Friday. “Mr. Katz and Mr. (H.F. “Gerry”) Lenfest are interested in securing the highest value for the company, which is why in their petition for dissolution of the assets, they have asked for a single-bid public auction.”
Each man had invested $16 million for a 26 percent stake in the company, but Norcross recently doubled his holdings after buying out a partner.
Norcross, a wealthy insurance executive and powerful Democrat, asked a Delaware court Friday to order an in-house auction among the current owners, a plan that would revamp the company’s thorny corporate structure, and perhaps oust Katz and Lenfest.
Currently, Katz and Norcross hold equal power under the two-man management committee, even though Norcross now owns 53 percent of the company, which is now called Interstate General Media.
The newspapers have changed hands repeatedly since 2006. Their value has fallen sharply, from $515 million in 2006 to $139 million in a 2010 bankruptcy auction to about $55 million in 2012.
The company operates the free Philly.com website along with new, fee-based portals for both the Inquirer and Daily News.