Since a group of local investors paid $515 million in cash - most of it borrowed - for the business in 2006, the value of the operation has plummeted because of the economic downturn and deteriorating prospects for big-city dailies.
It is possible that those investors, who put up about $150 million of the purchase price three years ago, will be wiped out because the company's $395 million in debt is so much greater than its value, which could be $180 million or less, according to experts. The group also assumed $47 million in pension liabilities.
Even among investors, there were varied reactions.
Brian P. Tierney, who persuaded local business people to join him in buying the papers three years ago, said it was too soon to say what would happen to the investors. "We won't really be certain about that until we complete the Chapter 11 process," Tierney, the company's chief executive officer, said yesterday.
William A. Graham IV, the biggest investor at more than $30 million, said he was optimistic that the current owners would retain a small stake, though they would have to put in more money to do so.
The company, in its filing, said lenders had rejected a proposal for an additional $20 million investment by current owners in return for a reduction in the debt.
Graham, who owns a large insurance brokerage, said he would invest in the papers again. "I'm proud I did it," he said.
By contrast, Bruce Toll, who is company chairman and among the largest investors, said he thought the investors would get nothing out of the bankruptcy process.
"I lost a lot of money," said Toll, a member of the Toll Bros. Inc. home-building family and a major auto dealer. "I'm upset to say the least.
