The plan called for the newspapers' lenders to receive $37 million in cash and ownership of the newspaper building at Broad and Callowhill streets, valued at $29 million.
The original proposal would have paid about 21 cents on the dollar to secured creditors holding $318 million in debt - most of the money that Tierney, Toll and other investors borrowed to buy the Philadelphia papers from McClatchy Newspapers in 2006.
Under the new proposal, delivered last night, the investors have offered to pay another $20 million to the secured lenders over the next five years, and to split 50/50 any profits that the newspapers make over the five-year period.
The investors also offered a 50/50 split of any net profits if the newspapers are sold again within five years, according to Jay Devine, a spokesman for Philadelphia Media Holdings LLC, the current owners.
Devine called reporters last night with basic details of the proposal. Lawyers for the senior lenders and Citizens Bank, the agent for the secured lenders, could not be reached for reaction.
The new offer is good only for the next week, in advance of an Oct. 28 deadline for the company to complete a public-disclosure statement. That's the next step toward a Nov. 18 auction, in which prequalified bidders would have a chance to top the offer from Toll, Haas and the carpenters union.
In a prepared statement, Tierney said he hoped "that Citizens Bank, Angelo Gordon and the remainder of the lending syndicate will see the tremendous value of this new offer and, for the good of our local community, agree to keep these assets locally owned and largely unleveraged."
Angelo, Gordon & Co. is a New York City-based investment firm, believed to be the largest single holder of the newspapers' IOUs.
Under a decision by Chief Bankruptcy Court Judge Stephen Raslavich, Angelo Gordon and other lenders won the right to use the value of those IOUs to submit a competing bid for the assets of the newspaper company.
Philadelphia Newspapers is appealing that decision in U.S. District Court.
