Philly news lenders appeal auction bid rules

By MARYCLAIRE DALE Associated Press Writer

PHILADELPHIA (AP) - Creditors trying to win control of Philadelphia's two major newspapers have asked a U.S. appeals court to reconsider a key ruling involving the upcoming bankruptcy auction.

Secured creditors are owed about $300 million by owners of The Philadelphia Inquirer and Philadelphia Daily News. They want to use that "IOU" to make a so-called "credit bid" for the company.

The auction is scheduled for April 27. A local group that includes some current owners has made an opening $67 million bid.

A federal appeals panel issued a 2-1 decision denying creditors the right to bid with the money owed. The lenders are now petitioning for the full 13-judge court to hear their appeal. They say credit bids are standard in bankruptcy auctions.