Local News in Crisis as McClatchy Newspapers File for Bankruptcy
Topline: McClatchy Co., America’s second-largest newspaper chain, filed for Chapter 11 bankruptcy protection Thursday amid mounting debt obligations and a dramatic loss of print revenue, a development seen as the continuance of the country’s news crisis.
- McClatchy’s 30 mastheads will continue to operate normally, according to the Washington Post, with the company taking on an additional $50 million in financing from Encina Business Credit.
- McClatchy’s stock will be delisted soon, and if approved by the court, control of the company will be given to Chatham Asset Management, a New Jersey hedge fund overseeing some $4.4 billion.
- The company has long struggled with its pension obligations, which as of March 2019 was underfunded by $535 million.
- McClatchy’s 2004 $4.5 billion acquisition of competitor Knight-Ridder increased the number of papers under its purview, but also saddled the company with an additional $2 billion of debt.
- Over $700 million in debt will be reorganized during the bankruptcy process, according to the Post, with 60% planned for elimination.
- READ MORE HERE.
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