PHILADELPHIA (AP) -- A bankruptcy auction of the company that publishes The Philadelphia Inquirer and Philadelphia Daily News has been postponed while creditors appeal a key ruling.

The auction of Philadelphia Newspapers LLC was put on hold Tuesday when the U.S. Third Circuit Court of Appeals agreed to hear the creditors' appeal on Dec. 15.

The court will decide whether or not to uphold a decision preventing creditors from using the $318 million in debt owed to them as part of a bid. A federal judge ruled earlier this month they must bid in cash.

The current owners are in bankruptcy trying to shed $400 million in debt. Some original investors are among the local group posting an auction bid of $37 million.

The bid, along with the $30 million headquarters building, would give senior lenders 22 cents on the dollar.

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