Updated as of July 24, 2020
As you know, on February 13, 2020, McClatchy began a voluntary restructuring process under Chapter 11 of the U.S. Bankruptcy Code to strengthen our balance sheet and position us to accelerate our digital transformation.
On July 24, we announced that we filed an asset purchase agreement with the U.S. Bankruptcy Court, formalizing the details of Chatham Asset Management’s successful bid for ownership of McClatchy in the Chapter 11 sale process. Among other terms, the agreement outlines that the entirety of the 30 McClatchy news organizations will move seamlessly to the new ownership structure. The filing is a key milestone in the reorganization process and paves the way for a change in control of our 163-year-old news company.
We want to emphasize that we still anticipate that go-forward vendors who continue to do business with us will be unaffected by the Chapter 11 and sale process, although it continues to be possible that some payments due prior to the commencement of cases to certain go-forward vendors may be delayed. We expect delayed payments will be cured or paid at closing, as we have already received a proposal that reflects an assumption of substantially all amounts owed to the Company’s go-forward trade vendors. 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.
To be clear, our finances continue to be sufficient to fund McClatchy’s operations, as well as the restructuring process, even amid the extraordinary global circumstances we are all facing right now.
Thank you for your continued support through this process. We appreciate your partnership.
Frequently Asked Questions
How will the restructuring and sale process affect McClatchy’s relationship with your vendors? Can I continue to work with McClatchy throughout the filing?
The proposal reflects an assumption of substantially all amounts owed to the Company’s go-forward trade vendors. So, as we announced previously, 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 continue to be delayed. We expect that delayed payments due to go-forward vendors will be cured or paid at closing.
Is there any impact to McClatchy’s relationships with vendors, suppliers, or service providers as a result of the ownership transition?
There are no immediate impacts to our supplier relationships. You should continue to work with McClatchy as usual.
Will Chatham reject my contract or service agreement?
Provided that you received and agreed to the terms of the Cure and Assignment Notice served on June 5, 2020 or June 26, 2020, as applicable, we expect that your contract will be assumed and assigned to Chatham as our new owner. You can expect that either the Company or Chatham will pay the agreed upon sum to bring your contract into good standing, as of the day we filed for Chapter 11, according to the outlined terms of your agreement at the conclusion of our Chapter 11 process.
Does Chatham plan to take on any contracts or service agreements that have been rejected?
If a contract has been rejected during the Chapter 11 process, Chatham will not be taking those contracts or service agreements. If a contract has not been rejected but was not the subject of a Cure and Assignment Notice, we cannot speak on behalf of Chatham, but we will be in touch in the event that there are changes to the terms of the contracts or service agreements.
Does McClatchy have the necessary financial resources to pay vendors while undergoing the Chapter 11 process?
As previously disclosed, McClatchy and its 30 local newsrooms continue to operate as usual, and the company is fulfilling its commitments to its stakeholders, including its vendors. Our finances continue to be sufficient to fund McClatchy’s operations, even amid the extraordinary circumstances posed by the unfolding COVID-19 pandemic and associated global economic challenges.
Will I continue to be paid in a timely manner throughout the restructuring process? Will there be any changes to payment processes or schedule?
We received approval from the Bankruptcy Court on February 14 to continue paying go-forward vendors in full under normal terms for goods and services provided on or after February 13, 2020, so we anticipate that those go-forward vendors that continue to do business with us will be unaffected by the Chapter 11 process. It is possible, however, 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 or paid at closing.
Why should I continue doing business with McClatchy?
In addition to the fact that we fully expect to pay current suppliers in the ordinary course of business, we believe this path 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 stakeholders who benefit from a financially strong McClatchy – including our vendors.
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.
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.
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. . We expect that delayed payments due to go-forward vendors will be cured or paid at closing.
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”.
How do I know if I have a claim?
We cannot advise on whether you specifically have an unresolved claim with McClatchy. However, if you believe you are owed money by McClatchy for goods and services delivered prior to the filing on February 13, you may have a claim, which can be filed with the court using the Proof of Claims form you received or online at www.kccllc.net/McClatchy.
Can you tell me how much I’m owed?
The Company and its claims agent cannot provide you advice on whether or not you have a claim, but if you have questions about filling out the Proof of Claims form, they are best directed to the KCC claims hotline: +1 (866) 810-6898.
Will my company contact change under new ownership?
There are no immediate changes to your company contact. We will keep you updated should there be changes down the line, as usual.
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 website, www.McClatchyTransformation.com, for more information.