Interested in buying the papers, Brian Tierney assembled a group of Philadelphia businesspeople and investors to make a bid.
Declining circulation and ad revenue for The Inquirer and Daily News caused financial strain, which resulted in the filing for Chapter 11 bankruptcy protection.
Working with Tierney a month before they even knew if the Philadelphia papers would be for sale, Steinour arranged US$450 million in financing from Citizens Financial Group's owner, the Royal Bank of Scotland.
[5] Tierney allayed fears by having the members of Philadelphia Media Holdings sign a pledge not to interfere with the paper's editorial independence.
The company began negotiations with its lenders to restructure its debt and in October 2008 Philadelphia Media Holdings deferred paying its interest payment despite having the money to do so.
[11][13][14] Charged $13.4 million in penalty interest and fees, Philadelphia Media Holdings continued negotiations with lenders until February 20, 2009, when the talks collapsed.
Philadelphia Media Holdings received support form most of the paper's unions and launched a public-relations campaign to promote local ownership.
[18] On May 21, Brian Tierney stepped down as CEO of Philadelphia Media Holdings and was replaced by Joseph Bondi, the company's restructuring adviser.
[19] The deal fell through after the group of lenders, under the name of Philadelphia Media Network, was unable to agree on a contract agreement with the union representing the company's drivers.
Philadelphia Media Network again won the auction and, after successfully negotiating a contract with all of the papers' fourteen unions, the US$139 million deal became official on October 8.