Newspaper chain McClatchy files Chapter 11 bankruptcy
Newspaper chain McClatchy, owner of publications such as The Miami Herald and Kansas City Star, filed for Chapter 11 bankruptcy protection Thursday after grappling with a pension crisis and the news industry's financial challenges. As part of the deal, the McClatchy family is expected to give up control of the company after more than 160 years.
The Sacramento, California-based company, whose 30 newsrooms also include the Fort Worth Star-Telegram and The Charlotte Observer, has arranged a deal to transfer ownership to one of its lenders and its largest shareholder, hedge fund Chatham Asset Management, and other lenders.
The newspaper chain also said it expects to transfer management of its $1.4 billion pension plan to the U.S. government's Pension Benefit Guaranty Corp. The costs of the company's pension plan, a legacy of an era in which the newspaper industry was rich with profits, weighed it down in recent years.
McClatchy, which filed Chapter 11 bankruptcy on Feb. 13, 2020, owns the Sacramento Bee.
Although bankruptcies can result in pensioners receiving less than they were due, McClatchy said Thursday that it believes its plan "would not have an adverse impact on qualified pension benefits for substantially all plan participants."
In a court filing, McClatchy listed the PBGC as its largest unsecured creditor with a claim of $530 million. The PBGC and a federal judge would have to sign off on the company's pension plan and sale.
https://www.usatoday.com/story/money/2020/02/13/mcclatchy-files-chapter-11-bankruptcy-pensions-pbgc/4747257002/
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