Inquirer, Daily News File Chapter 11

PHILADELPHIA - The owner of The Philadelphia Inquirer and Philadelphia Daily News has filed for bankruptcy.

Philadelphia Newspapers Inc. filed for Chapter 11 bankruptcy protection Sunday. The announcement came just a day after the Journal Register Co. filed for protection. That company publishes several suburban Philadelphia newspapers.

PNI is owned by Philadelphia Media Holdings LLC. The company says it's juggling $390 million in debt.

"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 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. Tierney said the company's goal was to bring its debt in line
with "the realities of the current economic and business conditions."

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

PNI is the second newspaper company in two days, and fourth in recent months, to seek bankruptcy protection. The Journal Register Co. filed for Chapter 11 on Saturday. The Chicago-based Tribune Co. sought bankruptcy protection in December, and The Star Tribune of Minneapolis followed suit last month.

The Newspaper Guild of Greater Philadelphia notified its union members of the filing in an e-mail Sunday night.

The e-mail tells members to stay calm. It says "the company is still in business, the papers are still publishing" and members should report for work.

A group of investors led by former advertising executive Brian Tierney bought the two Philadelphia papers for $562 million in June 2006.