Philadelphia Newspapers operates The Philadelphia Inquirer, Philadelphia Daily News and the Philly.com Web site.
Local investors bought the company three years ago but have struggled amid the industry-wide collapse.
The senior lenders are competing in the bankruptcy auction with a $67 million bid by a mix of current and new investors. Their bid includes $37 million in cash plus the headquarters building and parking lot.
That's a fraction of the company's $515 million sale price in early 2006.
Creditors will argue Thursday for the right to "credit bid," using some of the money owed them.
