Hedge fund firms slated to take over publisher McClatchy

A new term sheet for McClatchy provides for its senior secured lenders - hedge fund firms Chatham Asset Management and Brigade Capital Management - to acquire the struggling newspaper chain. There has been widespread speculation over such a move that is consistent with the bankruptcy process. Earlier this month, the nation’s second largest newspaper company began soliciting acquisition proposals to acquire the company through its voluntary Chapter 11 restructuring. The term sheet submitted by the hedge funds offer a credit bid of McClatchy’s first-lien debt of $263 million plus an additional $30 million and the refinancing of the company’s asset-backed loan revolver and the assumption of all amounts owed to the company’s trade vendors. According to McClatchy, its board of directors will evaluate the term sheet received from Chatham and Brigade against other proposals it may receive in the process. The Company's board of directors will evaluate the term sheet received from Chatham Asset Management and Brigade Capital Management against other proposals it may receive in the process. Earlier this month as the growing scale of the coronavirus pandemic became clear, McClatchy requested bankruptcy court approval of enhanced liquidity measures designed to moderate the costs of the case, reduce expenses and enhance the success of the emergence process. Anthony Melchiorre founded New Jersey-based Chatham in 2003 and the firm is currently embroiled in a disagreement with the board of directors at RR Donnelly & Son’s over a poison pill provision. The $4 billion hedge fund firm invests in high-yield bonds, leveraged loans, credit derivatives and special situations. New York-based Brigade is also a debt specialist with $27 billion in assets as of the end of 2019. "We appreciate the support of our principal existing lenders, who have come to the table with an offer that is generally consistent with our goals of addressing our legacy balance sheet issues and emerging from Chapter 11 as a viable going concern, while continuing to provide strong independent, local journalism in the public interest," said McClatchy President and CEO Craig Forman. According to McClatchy, it is business as usual in its newsrooms.

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