RTTNews | Jul 13, 2020 05:21AM EDT

05:21 Monday, July 13, 2020 (RTTNews.com) - Hedge-fund manager Chatham Asset Management LLC has won the bankruptcy auction for newspaper publisher McClatchy Co.

Following the process, the owner of the Miami Herald and The Charlotte Observer, which is burdened by heavy debt, hopes to emerge with new ownership, ending family ownership since it started 163 years ago.

In a statement, McClatchy, which operates 30 media companies in 14 states, said the auction was held as a part of its court-supervised sale process following its bankruptcy filing in February. The proposed agreement will be finalized and filed with the U.S. Bankruptcy Court in the coming days.

The sale is subject to approval by the judge overseeing its bankruptcy, currently scheduled for a hearing on July 24.

The country's second-largest newspaper publisher, which initially started publishing in 1857, filed its Chapter 11 petitions in the U.S. Bankruptcy Court for the Southern District of New York.

The decision followed the huge debt it faced due to its $4.5 billion acquisition of the Knight-Ridder newspaper chain in 2006, as well as large pension obligations. The Sacramento, California-based company started seeking sale proposals in April. Chatham, which was McClatchy's largest shareholder and debt holder, reportedly was in bidding battle with Brigade Capital Management and Alden Global Capital.

Under the new deal terms, McClatchy will come out of bankruptcy protection in the third quarter of 2020 in its totality with 30 local news titles, including The Kansas City Star, Fort Worth Star-Telegram and The Sacramento Bee. The company would then achieve a resolution and restructuring of its complex legacy debt and pension obligations.

McClatchy said it continues to expect that the Pension Benefit Guaranty Corp. or PBGC will assume its qualified pension plan, The McClatchy Company Retirement Plan. McClatchy is contributing an estimated $1.4 billion in pension assets to the PBGC.

Chatham already owns Canadian newspaper chain Postmedia and National Enquirer publisher American Media Inc.

Read the original article on RTTNews ( https://www.rttnews.com/3110377/hedge-fund-chatham-wins-bankruptcy-bid-for-newspaper-chain-mcclatchy.aspx)

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