- Associated Press - Sunday, May 25, 2014

PHILADELPHIA (AP) - George E. Norcross III and Lewis Katz made many of their millions while being in charge.

So when they began talking about buying The Inquirer’s parent company in 2011, they had concerns about the kind of business marriage theirs might be.

Norcross had already been turned down once in a bid to buy the company, he would later tell a Delaware judge, and he was willing to share control with Katz only if the deal allowed for an “amicable divorce.”

Katz didn’t recall having that discussion before the deal closed. “It wasn’t the time to talk about divorce,” he testified last month. “I mean, we were both putting up a lot of money… . There was a lot of respect going back from both of us.”

Now, little bliss remains among the men who, with four others, formed Interstate General Media Holdings L.L.C. in 2012 and, as co-managing partners, evenly shared control of major business decisions.

After months of turmoil at the privately held company - much of it spilling into public view - the divorce is scheduled to occur Tuesday at a private auction with an opening bid of $77 million.

What happens that morning is likely to have a lasting impact - and not just on the 1,800 employees who work for The Inquirer, Philadelphia Daily News, philly.com, and at a plant IGM owns outside Conshohocken. Through hearings in Philadelphia and Delaware, court filings, and public statements, both men have made clear they have different visions for the company, long a dominant local news source for hundreds of thousands in the region.

On Friday, Katz toured the plant with several men, but declined to say why or comment on the auction. The same day, Norcross‘ spokesman, Daniel Fee, said: “We are looking forward to Tuesday as an opportunity to put this litigation behind everyone and return the company’s focus to where it should be: providing outstanding journalism for the readers and advertisers of the papers and philly.com.”

The auction is to start at 9:30 a.m. at the Dechert law firm, with William B. Chandler III as the trustee.

Norcross and co-owners Joseph Buckelew and William Hankowsky form one group, with 57.45 percent of the company shares. Katz and H.F. “Gerry” Lenfest form the other, with 42.55 percent. Each will occupy separate conference rooms, and the bidding will decide which group buys out the other.

During his testimony, Norcross said $77 million should be the minimum bid - which represents the owners’ initial $61.1 million investment and existing debt, $15.3 million in mid-May.

The Delaware judge presiding over the case, Vice Chancellor Donald F. Parsons Jr., agreed, and set that as the first bid from the Norcross group.

Parsons’ order said each side must raise the bid by $1 million within 10 minutes or drop out. Within an hour after the auction ends, the two sides or Chandler will announce the winner and price.

How high the bids might rise is unclear. Fee, the Norcross spokesman, described the increments as at least $1 million.

The newspapers sold for about $562 million, including pension liabilities, in 2006, but the company has since had several owners and a bankruptcy, as the industry financials have tanked.

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