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Archive for Monday, February 23, 2009

Newspaper owner files for Chapter 11

February 23, 2009

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— The owner of The Philadelphia Inquirer and Philadelphia Daily News filed for Chapter 11 bankruptcy protection Sunday in an effort to restructure its debt load.

Philadelphia Newspapers Inc., owned by Philadelphia Media Holdings LLC, is the second newspaper company in two days, and fourth in recent months, to seek bankruptcy protection.

“This restructuring is focused solely on our debt, not our operations,” chief executive officer Brian P. Tierney said in a statement. “Our operations are sound and profitable.”

The filing Sunday indicated the company has between $100 million and $500 million in assets and liabilities in the same range. The company said it will continue the normal operations of its newspapers, magazines and online businesses without interruption during the debt-restructuring process. In a story posted on its Web site Sunday, the company says it has a debt load of $390 million.

“In the last two years, we experienced the rare trifecta of a dramatic decline in revenue, the worst economic crisis since the Great Depression and a debt structure out of line with current economic realities,” Tierney said.

The company said it decided to turn to bankruptcy court after negotiating with its lenders for the last 11 months.

The filings reiterate that the newspaper company hopes to reconfigure its debt rather than restructure its operations. The company was profitable by one accounting measure last year, earning $36 million before interest, taxes, depreciation and amortization, and excluding one-time items. That figure is expected to be at least $25 million in 2009.

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