Delaware court hears rival Inquirer owners' arguments

WILMINGTON - A Delaware judge pressed attorneys for the estranged owners of The Inquirer on Tuesday to explain to him why he should not preside over its parent company's dissolution and sale.

Tuesday's hearing was the second before a judge in two days, but the first held in Delaware in the five-month dispute between the owners of Interstate General Media, all of whom signed their names to a partnership agreement based on Delaware law.

While The Inquirer has been published in Philadelphia since 1829, its current parent company, IGM, has been registered in Delaware since it took over in March 2012.

"This is a big deal," Vice Chancellor Donald F. Parsons said, emphasizing that the case involves Delaware law and affects groups besides the owners that have an interest in the company's future. He noted that such disputes "can go on for a number of years."

Delaware is known for its business-friendly tax laws, and the Court of Chancery, without juries, almost exclusively decides business disputes.

Owners George E. Norcross III, William P. Hankowsky, and Joseph Buckelew are seeking to have Parsons dissolve the company and appoint a receiver to conduct a private auction among the current owners. Owners Lewis Katz and H.F. "Gerry" Lenfest are seeking to have Philadelphia Court of Common Pleas Judge Patricia A. McInerney dissolve the company and appoint a receiver to oversee a public auction.

Parsons said he had spoken to McInerney once and planned to do so again, with one likely to defer to the other in coming days. He did not indicate when a ruling would be handed down.

As in a similar hearing Monday before McInerney, the sides debated whether Chancery Court has exclusive domain over disputes based on Delaware law, as well as the timing of several lawsuits, involving personnel and the dissolution of the company, filed by the owners.

In November, McInerney granted a petition filed by Katz and Lenfest reinstating Inquirer editor William K. Marimow. She ruled in favor of the Norcross group, which sought to keep publisher Robert F. Hall, who fired Marimow on Oct. 7.

"The judge split the baby," Norcross attorney Robert Heim said, partly to suggest that the Marimow and Hall decisions were, at least legally, unrelated to the dissolution actions.

"The whole dispute was who had the power," said Katz-Lenfest attorney Garrett Moritz, arguing for keeping the case in Philadelphia. "This dissolution is Chapter Two of the same story."