Both Major Philadelphia Newspapers Bankrupt

 

PHILADELPHIA, PA (February 23, 2009) – Talks aimed at restructuring $390 million in debt broke down over the weekend after 11 months, so the owners of the Philadelphia Inquirer and the Philadelphia News filed for Chapter 11 bankruptcy protection on Sunday night.

Brian Tierney, CEO of Philadelphia Newspapers LLC, a local group of investors who bought the newspapers in 2006, said the Inquirer and Daily News will continue to operate as usual while going through the process. Tierney said that their aim in filing bankruptcy was to seek concessions from the banks that hold its debt, not form the paper's labor unions, The New York Times reported.

"Our operations are sound and profitable," Tierney said today in the Inquirer. "This restructuring is focused solely on our debt, not our operations."

Tierney and the local investors bought the papers in 2006 for $562 million.

During the 11 months of talking to their banks, the newspapers have been billed $13.4 million in penalty interest and fees, the Inquirer reported. Philadelphia Media Holdings, the parent company of Philadelphia Newspapers LLC, cut the headcount at the newspapers last summer with layoffs.

The Newspaper Guild, which represents newsroom and other employees of the company, alerted its members of the bankruptcy filing yesterday.

Also over the weekend the Journal Reister Co., owners of the New Haven Register, filed for Chapter 11 bankruptcy protection.

 

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