Philadelphia Newspapers LLC, the owner of the Philadelphia Inquirer and Daily News, has filed for Chapter 11 bankruptcy. The company also owns Philly.com.
This move was echoed by the Journal Register Co., which owns the Times Herald in Pennsylvania and Daily Times of Delaware County, Pa., among others.
Philadelphia Newspapers, a subsidiary of Philadelphia Media Holdings, said that while it will continue its normal operations of magazines, newspapers, and web sites, “a dramatic decline in revenue, the worst economic crisis since the Great Depression and a debt structure out of line with current economic realities” has forced them to restructure their finances.
According to Brian Tierney, CEO of Philadelphia Newspapers, the company previously spent 11 months negotiating with lenders. During that time they accrued $13.4 million in interest penalties from its lending group.
Tierney said bankruptcy was necessary to ensure cash flow for operations.
“Philadelphia Newspapers’ goal is to bring its debt in line with the realities of the current economic and business conditions,” Tierney said in a statement.
He added that Philadelphia Newspapers will seek court approval for up to $25 million in debtor-in-possession financing provided by an investor group.
Popularity: 3% [?]
February 27th, 2009 at 8:44 pm
I would imagine thats its tough to do business when you are in bankrupty. Few vendors or advertisers will want to sign contracts.