McClatchy announced July 24 that it 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.
The proposed asset purchase is scheduled for consideration by the court at a hearing on Aug. 4.
Under the deal, Chatham will acquire McClatchy for $263 million in a credit bid of the company's first-lien debt, plus $49 million in cash and the assumption of additional liabilities.
All employees will be offered their current job with the new McClatchy, with equivalent compensation, benefits and full credit for service years, McClatchy says. The agreement also says the new McClatchy will honor all current collective-bargaining agreements.
As part of the transition, Chairman Kevin McClatchy, President and CEO Craig Forman and fellow board directors announced plans to leave the company when the transaction closes by the end of the third quarter.
New Jersey-based hedge fund Chatham won a July 10 auction for McClatchy. Chatham is McClatchy’s biggest creditor and majority owner of Canada’s Postmedia Network.
Judge Michael E. Wiles shot down a challenge to Chatham’s bid from another hedge fund, Alden Capital Group.
There’s a five-day challenge period after the deal goes to the court, McClatchy’s D.C. bureau said.
Among McClatchy’s papers are the Miami Herald and The Sacramento Bee.