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Philly Chief Tierney Defends Bonus as Bankruptcy Neared

Magazine article Editor & Publisher

Philly Chief Tierney Defends Bonus as Bankruptcy Neared

Article excerpt

The chief executive of Philadelphia's two major daily newspapers defended the bonus he received in late 2008, weeks before the company filed for bankruptcy, and said lenders' criticism of the payout is "disingenuous."

Brian Tierney's comments followed a bankruptcy court hearing Monday at which senior lenders agreed to let Philadelphia Newspapers keep using its cash to fund operations through May 22.

The lenders also agreed to let the company hire New York-based investment banking firm Sonenshine Partners LLC at a cost of $75,000 a month to assist with the Chapter 11 reorganization.

The lenders previously complained that Sonenshine's work would duplicate that of another financial firm, Alvarez and Marsal, already advising the company on operations. However, the company maintains that Sonenshine's efforts will not be duplicative.

Philadelphia Newspapers operates The Philadelphia Inquirer and Philadelphia Daily News. The company filed for bankruptcy in February, citing $395 million in debt, much stemming from the 2006 purchase by a group of local investors led by Tierney.

The newspaper company recently lowered its 2009 income projections from $25 million to about $10 million before taxes, interest and other expenses. …

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