New McClatchy Owner Vows to Keep All Employees

McClatchy Co.’s new owner will keep all employees and most senior leaders and honor existing union contracts while continuing to operate news organizations in 30 U.S. markets, according to an agreement filed Friday in federal bankruptcy court.

Chatham Asset Management, a New Jersey hedge fund, will pay $312 million for the nation’s second largest local news company, which has been controlled by the founding McClatchy family for 163 years.

CEO Craig Forman and board chairman Kevin McClatchy, the great-great grandson of the company’s founder, will depart once the sale is final, according to mcclatchy.com citing the agreement approved by the McClatchy board of directors and filed in U.S. Bankruptcy Court for the Southern District of New York.

“While it will be humbling to pass the torch, we want to thank our employees, readers, communities and Chatham for recognizing the value of the public-service role of local journalism and supporting its mission,” Kevin McClatchy said in a statement.

Chatham’s was one of two binding bids submitted for the company earlier this month. A second bid, from the hedge fund Alden Global Capital, proposed to cut around 1,000 jobs and was valued at about $100 million less than Chatham’s, according to a court filing later Friday by McClatchy’s restructuring adviser.

Under the agreement submitted to the court, Chatham would name a board of directors and CEO for the new company, which will be privately held. All other senior executives will remain.

Judge Michael E. Wiles is scheduled to consider the agreement at an Aug. 4 hearing. The agreement calls for all parties to make a reasonable effort to close the sale no later than Sept. 4.

Friday’s filing by McClatchy spelled out for the court the terms of Chatham’s bid, which was submitted earlier this month. Current employees’ salary and benefits will remain unchanged and Chatham will recognize employees’ years of service. The new company also will honor current collective-bargaining agreements, McClatchy said in a statement.