What's left after a newspaper bankruptcy: 20 cents on the dollar

The parent company of the Philadelphia Inquirer, the Philadelphia Daily News, and the related Philly.com website could emerge from bankruptcy debt-free, if a proposal submitted by the ownership group that bought the paper in 2006 is accepted by lenders in court. Bruce Toll, of homebuilder Toll Bros. (TOL) fame, and public relations executive Brian Tierney are leading a bid to buy out the more than $300 million the company owes for 20 cents on the dollar in cash and real estate.

As the newspaper business continues to reel from a combination of high fixed costs and falling advertising revenue, established papers across the country have been going bankrupt or seeking help from wealthy local citizens. The Boston Globe, which the New York Times Co. (NYT) owns but is actively shopping for sale, has seen interest from at least two local groups, as well as one private equity fund. Even though such newspaper sales have not worked out well in the past, there is hope that re-making the Inquirer as a debt-free company will allow it to be marginally profitable.