McClatchy names Chatham Asset Manager as winning bidder for assets

By Caroline Salls

Pittsburgh, July 13 – McClatchy Co. announced in a Sunday news release that the auction held as part of its court-supervised asset sale process concluded with Chatham Asset Management LLC being deemed the winning bidder.

Under terms of the proposed purchase agreement, which McClatchy said would be finalized and filed with the U.S. Bankruptcy Court for the Southern District of New York in the coming days, McClatchy will transition out of Chapter 11 “in its totality, as one company serving 30 communities across America through its iconic local news titles.”

As previously reported, McClatchy received an offer from Chatham Asset Management and Brigade Capital Management, LP under which Chatham and Brigade offered to acquire McClatchy through a credit-bid of $263 million of first-lien debt, plus new-money consideration of $30 million, the assumption or refinancing of the company’s ABL revolver and the assumption of substantially all amounts owed to go-forward trade vendors.

The company said in Sunday’s release that the agreement positions it to exit Chapter 11 protection in the third quarter, having achieved a resolution and restructuring of its complex legacy debt and pension obligations, while maximizing value for creditors.

Notably, McClatchy said it continues to expect that the Pension Benefit Guaranty Corp. will assume McClatchy’s qualified pension plan, with the company contributing an estimated $1.4 billion in pension assets to the PBGC.

“We are pleased that Chatham and the supportive secured first-lien creditors believe in our business and our mission,” McClatchy president and chief executive officer Craig Forman said in the release.

The purchase agreement will be subject to court confirmation, currently scheduled for a hearing on July 24, as well as customary regulatory approvals and other customary closing conditions. McClatchy is a news and information provider based in Sacramento, Calif. The company filed bankruptcy on Feb. 13 under Chapter 11 case number 20-10418.

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