Transition begins at Philadelphia Newspapers

Brian P. Tierney, chief executive officer of The Inquirer's parent company, will relinquish day-to-day control of the media firm at the end of next week to assure a smooth transition to its new owners, the company announced Friday.

Tierney will stay on as publisher of The Inquirer, but the role of CEO of Philadelphia Newspapers L.L.C. will be filled on a temporary basis by Joseph Bondi, a managing director at Alvarez & Marsal, a firm that provides financial advice to struggling companies.

Bondi has been advising Philadelphia Newspapers, which also owns the Daily News and Philly.com, throughout its bankruptcy. He will be the CEO until it is taken over by the new owners, a collection of financial institutions that held the majority of the firm's $318 million debt.

"For the sake of the 4,500 employees here, I have pledged all along to make this a really smooth transition," Tierney said in an interview. "To make the transition even smoother, I have suggested perhaps I step down as CEO as of next Friday."

Tierney's agreement to give up his role as CEO was part of the settlement reached with the company's new owners to resolve "all remaining issues among them in the bankruptcy case," according to a statement issued by the company. That would include a protracted dispute over the unauthorized taping of a meeting by a representative of the senior lenders in November 2008.

"We are very pleased with the resolution, which assures a smooth transition to the new owners," said Fred S. Hodara, lead attorney for the senior lenders.

The announcement would seem to signal an end to the public tensions between Tierney and his creditors, who bought the media firm at auction April 28 for $139 million.

It also ends Tierney's 46-month tenure as the leader of his hometown newspapers, which he and a group of local investors purchased for $515 million in 2006. During that time, the Daily News won a Pulitzer Prize for investigative reporting, and The Inquirer produced in-depth stories on the city's court system and the Board of Revision of Taxes, which have led to major reforms.

The agreement between Tierney and the senior lenders came after several days of private negotiations mediated by Chief Bankruptcy Judge Stephen Raslavich.

The owners are Angelo, Gordon & Co.; Credit Suisse; Halbis Distressed Opportunities Master Fund Ltd.; McDonnell Investment Management L.L.C.; Venor Capital Master Fund L.L.C.; Alden Global Capital; the Bank of Utah; Gannet Peak CLO I Ltd.; Wind River CLO II; Tate Investors Ltd.; Wind River CLO I; Pacifica CDO V Ltd.; Pacifica CDO VI Ltd.; Credit Opportunities Fund Ltd.; and Cerberus Partners L.P.

Although they are not expected to take over formally until the end of June, at the earliest, they have begun contract talks with the company's 14 unions.

Conducting those talks have been two executives named to lead the company going forward: Gregory J. Osberg, former president and worldwide publisher of Newsweek and Newsweek.com, and Robert J. Hall, former Inquirer publisher. Osberg is to be CEO. Hall is to serve as chief operating officer.

Tierney said he would ensure that Osberg and Hall get the access to company employees and financial information needed to negotiate contracts and prepare to run the company.

"I've offered to help in any way I can between now and when the deal closes, which is now scheduled for late June," Tierney said. "It is important that the new management team get as strong a platform as they can to build success. I am committed to doing that because it is good for everyone."