Fight over control of Philadelphia newspaper moves into court
Posted: 6:04 pm Mon, October 28, 2013
PHILADELPHIA — Feuding owners fought over control of The Philadelphia Inquirer on Monday before a city judge who must decide if the dispute belongs in her court or in Delaware, where the partners incorporated last year.
If she keeps the case, Judge Patricia McInerney must also determine the fate of Publisher Bob Hall and Editor Bill Marimow. Their jobs are in limbo amid dueling lawsuits filed in recent weeks by the rival owners.
Powerful New Jersey Democrat and insurance magnate George Norcross backs Hall, who recently fired Marimow.
Business tycoons Lewis Katz and H.F. “Gerry” Lenfest support Marimow, a Pulitzer Prize-winner — formerly editor of The Baltimore Sun — known more for investigative journalism than digital innovation. Katz and Lenfest insist that Hall abused his authority, and that his contract had expired in August.
McInerney did not say when she would rule, but met privately with Norcross and Katz for more than 30 minutes after a phalanx of high-priced lawyers argued the issues in public.
The newspaper company — which also publishes the Philadelphia Daily News and Philly.com — has changed hands five times in seven years, a period that included a bitter bankruptcy fight, a public auction and a precipitous price drop from $515 million to $55 million last year.
Katz, the former owner of the New Jersey Nets, kicked in $16 million for a 26 percent stake, but complained in his lawsuit that he was not consulted about Marimow’s firing. He and Norcross make up the two-person management committee charged with steering the company. But it’s not clear what happens if they disagree, with no third party to break the tie.
Norcross’s precise stake is not clear, but he and three low-profile partners together hold 58 percent of the shares, compared to 42 percent for Katz and Lenfest, according to his countersuit, which seeks to keep the case in Delaware. His lawyer argued that the law states the case should be tried in the state where a company incorporated, absent some “compelling reason.”
“You don’t think it’s compelling that it’s The Philadelphia Inquirer, and this is Philadelphia? And the citizens of Philadelphia could come into the courtroom and listen to the proceedings?” McInerney asked.
She did not immediately rule from the bench Monday, instead taking the issues under advisement.
Katz declined comment after the hearing, which Lenfest, Hall and Marimow also attended at City Hall. Norcross, in brief remarks, said he hoped the dispute would not detract from the company’s mission.
“Our goal from the beginning, [when] we acquired this enterprise, was to make it better for the readership, and better for the region,” he said. “We continue to be hopeful.”
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