• The Wall Street Journal, Monday, September 7, 2009 11:02 PM

Former Philadelphia adman Brian Tierney will face off against creditors that want to seize ownership of the Philadelphia Inquirer and Philadelphia Daily News from him in bankruptcy court on Sept. 15. Tierney is trying to remain in charge of the papers by buying out the creditors, that are owed $300 million, for pennies on the dollar. If Tierney prevails, he could become a model for how other urban newspapers work through bankruptcy.

The upcoming hearing will set ground rules for an auction that will determine the papers' fate. Creditors want to use the value of their loans to bid on the papers. If the judge agrees, the creditors are likely to win control. A majority of them must then bid their loans for the papers.

To counter that plan, Tierney has persuaded two investors from his original purchase, and one anonymous backer, to pledge more than $35 million in fresh cash in a new bid, even though original investors' money has been wiped out. Under Tierney's plan, the creditors would walk away with just the cash and some real estate, including the papers' headquarters.

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