Vendors
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On February 13, 2020, we announced that we have commenced a voluntary restructuring under Chapter 11 of the U.S. Bankruptcy Code. This process is another step in positioning us to accelerate our digital transformation and will substantially de-lever the business while also positioning us for future growth over the long term.

As is typical in Chapter 11 proceedings, we have filed customary first day motions that will allow us to maintain commitments to our vendors throughout the process. The administrative components of our Chapter 11 case will be ironed out in the next few weeks and we will make you aware of any action you may need to take to seek payment. For now, there is no action required of you.

We anticipate that go-forward vendors who continue to do business with us will be unaffected by the Chapter 11 process, although it is possible that some payments due prior to the commencement of cases to certain go-forward vendors may be delayed. We expect that delayed payments due to go-forward vendors will be cured in full when the Company exits Chapter 11. To date, we have paid our bills under the normal terms of our contracts, and we believe we have minimal outstanding trade payables as of the filing.

McClatchy has sufficient liquidity to address all of our ordinary course operational cash needs and obligations at this time. We have 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.

Thank you for your continued support through this process. We appreciate your partnership.

Frequently Asked Questions

1. How will the restructuring affect McClatchy’s relationship with your vendors? Can I continue to work with McClatchy throughout the filing?

Our debtor-in-possession financing of $50 million is in place to provide additional liquidity to fund our operations as usual while we work through this process quickly. McClatchy has filed customary first day motions that will allow us to maintain commitments to our various stakeholder groups, including our vendors. We anticipate that go-forward vendors that continue to do business with the us will be unaffected by the Chapter 11 process, although it is possible that some payments due prior to the commencement of cases to certain go-forward vendors may be delayed. These delayed payments to go-forward vendors are anticipated to be paid in full when the Company exits Chapter 11. We look forward to continuing to partner with our valued vendors and suppliers throughout this process and into the future.

2. Will I experience any changes to the terms of my contract as a result of this filing?

McClatchy and our 30 local newsrooms are operating as usual, and we continue to rely on our partnership with our vendors to deliver for our readers and subscribers. We do not expect there to be contract changes for the vast majority of our vendors. We will be in touch with any impacted vendors as we proceed with our case.

3. Does McClatchy have the necessary financial resources to pay vendors while undergoing the Chapter 11 process?

Yes. Our debtor-in-possession financing of $50 million is in place to provide additional liquidity to fund our operations as usual while we work through this process quickly. We anticipate that go-forward vendors that continue to do business with the us will be unaffected by the Chapter 11 process, although it is possible that some payments due prior to the commencement of cases to certain go-forward vendors may be delayed. These delayed payments to go-forward vendors are anticipated to be paid in full when the Company exits Chapter 11.

4. Will I continue to be paid in a timely manner throughout the restructuring process? Will there be any changes to payment processes or schedule?

As is typical in Chapter 11 proceedings, we have filed customary first day motions that will allow us to maintain our commitments to our vendors and suppliers. It is anticipated that those go-forward vendors that continue to do business with us will be unaffected by the Chapter 11 process, although it is possible that some payments due prior to the commencement of cases to certain go-forward vendors may be delayed. These delayed payments to go-forward vendors are anticipated to be cured in full when the Company exits Chapter 11.

5. Are there any forms I need to complete or any other actions I need to take to ensure I am paid for goods and services?

If you believe you are owed money for goods and services delivered before the filing of our Chapter 11 petitions on February 13, you should visit www.kccllc.net/McClatchy for more information.

6. Why should I continue doing business with you now?

In addition to the fact that we fully expect to pay current suppliers in the ordinary course of business, we believe today’s announcement represents the best option for a timely and efficient resolution to protect the company’s future. Once completed, this process will provide certainty to our qualified pension plan participants and to the wider group of stakeholders who benefit from a financially strong McClatchy – including our vendors.

7. What is a “pre-petition” claim? What is a “post-petition” claim?

Pre-petition claims refer to the few select cases where there are invoices outstanding for goods or services delivered to McClatchy before February 13, the day of our Chapter 11 filing, which will need to be settled as a part of the Chapter 11 process. Please note that it is anticipated that those go-forward vendors that continue to do business with us will be unaffected by the Chapter 11 process, although it is possible that some pre-petition payments to certain go-forward vendors may be delayed. These delayed payments to go-forward vendors are anticipated to be cured in full when the Company exits Chapter 11.

Post-petition refers to payments to vendors for all goods and services deliver on or after our filing date of February 13. We fully expect to pay these vendors in the ordinary course of business for all goods and services delivered on or after February 13 – or “post-petition”.

8. How do I know if I have a pre-petition claim? What do I do if I have a pre-petition claim?

To date, we have paid our bills under the normal terms of our contracts, and we believe we have minimal outstanding trade payables as of the filing. If you believe you have a pre-petition claim, your company may file a proof-of-claim form with the Court. This form can also be found online at www.kccllc.net/McClatchy.

9. How will I be kept informed during this process? Where can I go if I have additional questions?

We are fully committed to keeping you updated throughout this process. If you have any questions about today’s announcement, please direct them to your usual contact. You can also visit this dedicated microsite, www.McClatchyTransformation.com, for more information.