The parent company of The Philadelphia Inquirer and The Philadelphia Daily News filed for bankruptcy protection Sunday to restructure a $390 million debt burden.
Philadelphia became the second newspaper company to file for bankruptcy just this weekend. On Saturday, Journal Register Co. disclosed it had filed for bankruptcy protection. Media giant Tribune Co. filed for bankruptcy reorganization in December, reeling under a nearly $13 billion debt.
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 group of Philadelphia-area investors who bought the papers in 2006 for $562 million from The McClatchy Co. — which had bought them from the Knight-Ridder Co. and did not intend to keep them — said the paper would continue to publish.
“This restructuring is focused solely on our debt, not our operations,” CEO Brian P. Tierney said in a statement.
Tierney said the papers’ ” are sound and profitable” on an operating basis.
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.