Monday, February 23, 2009

Owners of Philadelphia Papers File for Bankruptcy

Philadelphia Newspapers, a subsidiary of Philadelphia Media Holdings, the owner of The Philadelphia Inquirer and The Philadelphia Daily News, filed for bankruptcy protection Sunday to restructure a $390 million debt burden.

It's the second major newspaper bankruptcy filing over the past weekend. On Saturday, Journal Register Co. announced its own bankruptcy filing. Philadelphia Newspapers LLC said it has paid $13.4 million in penalty interest and fees in the past 11 months while negotiating a change in its loan agreement. The owners said the papers will continue to publish.

"This restructuring is focused solely on our debt, not our operations," CEO Brian P. Tierney said in a statement, and that the papers are sound and profitable.

Philadelphia Newspapers is asking for court approval of $25 million in debtor-in-possession financing, which it had arranged with NewSpring Capital in Radnor, Pa.

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