Sacramento, CA…From McClatchy..”On February 13, 2020, we announced that we are commencing a restructuring under Chapter 11 of the U.S. Bankruptcy Code to provide McClatchy with immediate protection while we pursue approval of our proposed restructuring plan and work to definitively address the Company’s funded debt, strengthen our balance sheet, and address our pension obligations moving forward.
We are initiating this process following active restructuring negotiations with the Pension Benefit Guaranty Corporation (PBGC), the federal agency that guarantees benefits under McClatchy’s qualified pension plan, and our largest secured creditor to address the future of our pension obligations and capital structure, which were previously disclosed in the Company’s press release dated November 13, 2019 and extended as part of McClatchy’s January 15, 2020 standstill agreement with the PBGC.
Our Board of Directors and management team is confident that this is the best option for a swift resolution that maximizes outcomes for our stakeholders. This restructuring process allows us to continue our digital transformation and operate without the limitations of our capital structure and pension payment obligations from another era. And, once completed, this process will provide certainty to our qualified pension plan participants and to the wider group of employees and stakeholders who benefit from a financially strong McClatchy. Importantly, filing for Chapter 11 will allow us to continue to operate as usual. McClatchy has obtained debtor-in-possession financing of $50 million which, coupled with the Company’s normal operating cash flows, will provide ample liquidity through which McClatchy and all of our local news outlets will operate as usual throughout this process.
Throughout this process, we will maintain the same unwavering commitment to delivering the strong, independent journalism that is essential to our local communities.
The media industry has been under tremendous pressure for years. Technological advances, consumer-behavior shifts, and business-model challenges are among the many disruptive forces affecting the media business. We believe the actions we have taken are an important step to ensure a strong future for McClatchy, and we look forward to emerging from this process in the next few months with a stronger financial foundation. At that time, we expect to be even better positioned to advance our digital transformation and continue delivering essential local news to our subscribers and readers in the communities we serve.
In the meantime, we are committed to keeping our stakeholders updated throughout this process. To start, on this website, you have access to additional information, FAQs, and other resources to help you better understand this process.
Chief Executive Officer, McClatchy