McClatchy Co. (NYSE American-MNI) today announced it has commenced a voluntary restructuring under Chapter 11 of the U.S. Bankruptcy Code following the solicitation of a Plan of Reorganization (“the Plan”) among its key stakeholders. The Chapter 11 filing provides immediate protection to the Company, which will continue to operate in the ordinary course of business as it pursues approval of the restructuring plan with its secured lenders, bondholders, and the Pension Benefit Guaranty Corporation (PBGC).
McClatchy and each of its 53 wholly owned subsidiaries filed their voluntary Chapter 11 petitions in the U.S. Bankruptcy Court for the Southern District of New York. During the case, McClatchy and its 30 local newsrooms are operating as usual.
The Company has obtained new $50 million debtor-in-possession financing from Encina Business Credit which, coupled with McClatchy’s normal operating cash flows, provides ample liquidity for Sacramento-based McClatchy and all of its local news outlets to operate as usual and fulfill ongoing commitments to stakeholders. The Company aims to emerge from this process in the next few months.
“McClatchy’s Plan provides a resolution to legacy debt and pension obligations while maximizing outcomes for customers and other stakeholders,” said Craig Forman, President and Chief Executive Officer. “When local media suffers in the face of industry challenges, communities suffer: polarization grows, civic connections fray and borrowing costs rise for local governments. We are moving with speed and focus to benefit all our stakeholders and our communities.”
“McClatchy remains a strong operating company with an enduring commitment to independent journalism that spans five generations of my family,” commented Kevin McClatchy, Chairman of McClatchy’s Board of Directors and great-great grandson of the Company’s founder, James McClatchy. “This restructuring is a necessary and positive step forward for the business, and the entire Board of Directors has made great efforts to ensure the company is able to operate as usual throughout this process. We are privileged to serve the 30 communities across the country that together make McClatchy and are ever grateful to all of our stakeholders – subscribers, readers, advertisers, vendors, investors, and employees – who have enabled our legacy to date. We look forward to the continued success of such an outstanding group of colleagues long into the future.”
more detail at: http://investors.mcclatchy.com/news-releases/news-release-details/mcclatchy-commences-voluntary-chapter-11-while-soliciting