McClatchy filed for Chapter 11 bankruptcy Thursday in a move executives say won’t result in layoffs but will put majority ownership of yet another media company—this time a 163-year-old, family-owned publisher—in the hands of a hedge fund. (Adweek)
The company, whose newspapers include the Miami Herald, The Kansas City Star, The Sacramento Bee, The Charlotte Observer, The News & Observer in Raleigh, North Carolina, and the Fort Worth Star-Telegram in Texas, says it plans to stay in business and emerge from bankruptcy in the next few months. (CNN Business)
McClatchy has received $50 million debtor-in-possession financing from Encina Business Credit. That, combined with normal operating cash flows, will provide enough cash for the company, still based in Sacramento, Calif., to continue to function. (NBC News / AP)
The company has struggled in recent years to meet pension demands, including $124 million in pension funding due in 2020. In a post on McClatchy’s D.C. bureau site, chairman Kevin McClatchy said the company’s 75-year-old pension plan includes “10 pensioners for every single active employee.” (Poynter)
It was a thriving family business that got its start in 1857 as a four-page newspaper for residents of Sacramento in the wake of the gold rush. Under McClatchy’s plan, the hedge fund Chatham Asset Management, a major lender and shareholder for the chain, would operate McClatchy as a private company. (NYT)