its bid on May 16. On May 17, Tierney was told Philadelphia Media Holdings had the best bid, but they needed more money. After two days of negotiations, on May 19 McClatchy chairman Gary B. Pruitt told Tierney they had a deal. The deal was announced May 23, with Philadelphia Media Holdings paying US$515 million and assuming the papers' liabilities, including US$47 million in pension liabilities. There was excitement that The Philadelphia Inquirer and the Philadelphia Daily News would be under local ownership for the first time since Walter Annenberg sold the paper to Knight Newspapers in 1969. The buyout was met with skepticism, however, among the employees at The Inquirer, who feared the new owners might threaten the editorial independence of the newspaper. Concerns were especially directed to Brian Tierney, who in the past had criticized Inquirer reporters for doing negative stories about his clients during his time at Tierney Communications. Tierney allayed fears by having the members of Philadelphia Media Holdings sign a pledge not to interfere with the paper's editorial independence. Tierney said he would combat The Inquirer's decreasing revenue and circulation by spending millions on advertisements and promotions and not by laying off staff. Bankruptcy The Philadelphia Inquirer's and Philadelphia Daily News' circulation had been steadily dropping years before Philadelphia Media Holdings bought the papers. In 2007 The Inquirer's weekday circulation slightly rose, however its Sunday circulation continued to drop. The rise in circulation was only temporary and the newspaper's circulation has since continued to fall. Not helping the financial situation is the unexpected large drop in advertisement revenue. To help cut cost and repay debt Philadelphia Media Holdings cut jobs at The Philadelphia Inquirer in January 2007, and again at The Inquirer and the Daily News in February 2008. On June 1, 2008, Philadelphia Media Holdings missed its interest payment on US$85 million in junior loans. Philadelphia Media Holdings missed the payment because it didn't maintain debt-to-cash flow ratio its senior lenders required so they blocked the payment. The company began negotiations with its lenders to restructure its debt and in October 2008 Philadelphia Media Holdings deferred paying its interest payment despite having the money to do so. Charged $13.4 million in penalty interest and fees, Philadelphia Media Holdings continued negotiations with lenders until February 20, 2009, when the talks collapsed. Late the next day Philadelphia Newspapers LLC, the subsidiary of Philadelphia Media Holdings that