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.
Nonetheless, the company in a court filing defended $1.34 million in bonuses paid to 45 employees at the end of 2008, shortly before the Feb. 22 bankruptcy petition. The filing did not specify the amount of Tierney's bonus, but published reports have put it at $350,000, on top of his $518,000 salary.
Tierney said Monday that the lenders at one point offered him a deal that would have paid him millions if he would have ceded to their plans for the company.
"They have been incredibly disingenuous over their feigned (concerns) about my compensation," Tierney said.
Chairman Bruce Toll, the housing mogul, previously told The Associated Press that the company's board approved the bonuses, along with since-rescinded pay raises that would have boosted Tierney's salary to $850,000.
Members of the Newspaper Guild of Greater Philadelphia last year agreed to give up promised $25-a-week raises due to the company's financial woes.
Toll is among a group of about eight investors who have offered to put up $25 million in temporary financing, but only under the condition that Tierney remain at the helm. Lawyers for the creditors have opposed that condition and offered their own $20 million interim financing plan.
Morey money-related links:
Get Action News on your website
