Tierney loses Philly papers to lenders in bankruptcy auction
Brian Tierney has lost the Philadelphia papers to a group of senior lenders that paid about $135 million for the Inquirer, the Daily News and some real estate in a bankruptcy auction that concluded Wednesday.
The senior lenders were owed about $300 million, according to The Wall Street Journal, for debt they bought at a discount from the original lenders. They could not use the money owed toward the purchase price of the papers during the auction.
Angelo, Gordon & Co., an investment firm that is part of the winning group, has been a lead secured creditor in two other newspaper company bankruptcies: Tribune Company and The (Minneapolis) Star Tribune.
Tierney's run with the papers started four years ago in March 2006, when Knight Ridder sold its newspapers to McClatchy, which then put 12 papers up for sale, including the Inquirer and the Daily News.
That same month, Tierney declared his interest in the papers, which he purchased for $562 million the following May.
Tierney took over as publisher in September, and soon after began a round of union negotiations that were resolved not too long after Bill Marimow was named editor of the Inquirer.
Tierney was upbeat about the papers' prospects a year after buying them, but just one year later, in June 2008, it was clear the debt burden was becoming overwhelming.
In February 2009, Philadelphia Media Holdings LLC declared bankruptcy.
Wednesday's sale will be finalized on May 25 when the winning company presents its plan for emerging from bankruptcy during a confirmation hearing before U.S. Bankruptcy Judge Stephen Raslavich in Philadelphia.
Tierney spoke briefly with reporters immediately after the auction ended, praising the local investors and expressing pride in "the highest price paid for a newspaper in quite a long time."
Below is a detailed time line of events leading up to this week's auction, with links to Poynter Online coverage.