February 22, 2009
Philly newspaper owners file bankruptcy
The company that owns both major Philadelphia daily newspapers has filed for bankruptcy to restructure a $390 million debt load, Philly.com reported Sunday.
Philadelphia Newspapers LLC -- which owns The Philadelphia Inquirer and the Philadelphia Daily News as well as Philly.com -- said the voluntary Chapter 11 filing will not disrupt its day-to-day operations.The company was acquired in 2006 by a group of investors from the Philadelphia area in a $562 million deal. Chief Executive Officer Brian P. Tierney -- who led a group responsible for about $150 million of the price -- said in a news release the bankruptcy filing was
focused solely on our debt, not our operations.
Our operations are sound and profitable, he said.
The filing comes amid a slump in advertising, increasingly expensive newsprint and the loss of print edition readers to online consumption. The company has been out of compliance with the terms of its loan agreements, and said the decision to file for bankruptcy followed 11 months of negotiations with lenders -- during which penalty and interest charges amounted to $113.4 million.
Philadelphia Newspapers' filing comes less than a month after a similar filing by The Star Tribune of Minneapolis. The Tribune Co. -- which took on $13 billion in when Chicago real estate executive Sam Zell acquired the company in 2007 -- filed for bankruptcy protection in December.