McClatchy receives court confirmation of plan of distribution

By Sarah Lizee

Olympia, Wash., Sept. 28 – McClatchy Co. received court confirmation of its plan of distribution and approval of the related disclosure statement Friday with the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, McClatchy reached a global settlement in connection with its asset sale transaction under which the parties agreed to support confirmation of the plan, resolve alleged estate claims and establish a trust for the benefit of general unsecured creditors. The settlement and the company’s asset sale were approved on Aug. 7.

The company said it believes that confirmation of the plan and completion of the settlement is in the best interests of all stakeholders and will provide for the efficient winddown of the Chapter 11 cases.

Under the plan, administrative claims, priority tax claims and other priority claims will be paid in full in cash.

Holders of deferred amounts claims, including $500,000 payable to the advisers of the asset purchaser, $100,000 to unsecured creditors committee advisers, $600,000 to the general unsecured creditors recovery trust and other professional fees and expenses will be paid from the proceeds of a tax refund and excess cash.

First-lien notes claims and debtor-in-possession financing claims were satisfied upon closing of the sale.

Other secured claims will be paid in full in cash or holders will receive another treatment that renders the claims unimpaired.

Holders of second-lien term loan claims will receive $1.00 and will not receive any other distribution until general unsecured claims have been paid in full.

Holders of third-lien notes claims, subordinated claims and existing parent equity will receive no distribution.

Holders of general unsecured claims will receive a share of GUC recovery trust interests.

McClatchy is a news and information provider based in Sacramento, Calif. The company filed bankruptcy on Feb. 13, 2020 under Chapter 11 case number 20-10418.

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