McClatchy submits new sale timeline to court as negotiations with Chatham continue
McClatchy Co. filed a new sale timeline to a federal bankruptcy court late Friday, a signal that the company has yet to reach final agreement on terms with the New Jersey hedge fund that won it at auction.
The new timeline pushes the sale proceedings into August, partially because Judge Michael E. Wiles, who is presiding over McClatchy’s case, has a full calendar until then.
“We’re continuing to work collaboratively with Chatham Asset Management on the final details of the transaction,” the company said in a statement that included few details.
The original deadline for filing the agreement was Wednesday, but McClatchy notified the court late that night that it expected to file Friday.
On Friday, it filed the new timeline.
Under the new schedule, McClatchy expects to file the agreement by July 24, which is when Wiles had originally been scheduled to approve the sale.
Because of an unrelated trial on the judge’s calendar, the date for him to approve the sale moves to Aug. 4.
The company said it does not expect the new timeline to affect the Aug. 31 deadline for the sale to close.
Friday evening’s filing was another surprising development in bankruptcy proceedings that initially were expected to take less than 90 days but are now sure to go beyond six months, with millions of dollars spent on legal and advisory fees amid an economic downturn.
The delay is the fourth since July 8, when the auction was initially scheduled, then postponed twice.
In a Wednesday night email to employees, McClatchy CEO Craig Forman urged patience and said there were “very few details to hammer out” with Chatham.
McClatchy did not say what the sticking points are, and representatives for Chatham did not respond to an email seeking comment.
McClatchy failed to reach a restructuring plan with its creditors ahead of filing bankruptcy Feb. 13, but said soon after that it had reached substantial agreement on major issues and hoped to exit quickly with Chatham as the new owner.
But negotiations dragged on, the ensuing pandemic changed the economics of the deal and McClatchy turned instead to an auction for sale to the highest bidder.
Chatham, which has invested in McClatchy since 2009, is majority owner of Canada’s largest news chain, Ottawa-based Postmedia Network Canada Corp. It also owns American Media, publisher of the National Enquirer.
If McClatchy and Chatham fail to reach agreement, the news company or Wiles could turn to a second hedge fund that offered a binding bid, Alden Capital Group. Alden is the majority owner of Colorado-based MediaNews Group and also owns a third of Tribune Co.
The timeline allows a five-day challenge period after the agreement is submitted to the court.
McClatchy owns media titles in 14 states and Washington, D.C., including the Miami Herald, the Kansas City Star, the Sacramento Bee, the Charlotte Observer, the (Raleigh) News & Observer and the Fort Worth Star-Telegram.
This story was originally published July 17, 2020 at 8:55 PM with the headline "McClatchy submits new sale timeline to court as negotiations with Chatham continue."
