The long slide in the U.S. newspaper industry took another dramatic turn Thursday.
McClatchy Co., which operates the Miami Herald and The Kansas City Star among its 30 newsrooms in 14 states, announced it has filed for a Chapter 11 bankruptcy restructuring. Saddled with debt and pension obligations, McClatchy said it will continue to operate as normal during the process.
The company said it plans to emerge from bankruptcy in the next few months.
"McClatchy remains a strong operating company with an enduring commitment to independent journalism that spans five generations of my family,'' said Kevin McClatchy, the company's chairman great-great grandson of its founder, James McClatchy.
"This restructuring is a necessary and positive step forward for the business, and the entire Board of Directors has made great efforts to ensure the company is able to operate as usual throughout this process," Kevin McClatchy added in a statement.
The company said it's negotiating with the Pension Benefit Guaranty Corp., the federal insurer of private pension plans, and its largest creditor "to address the future of our pension obligations and capital structure." The company said it expects that the PBGC will take over McClatchy's qualified pension plan.
McClatchy bought the Knight Ridder newspaper chain — which included the Miami Herald, the San Jose Mercury News and The Philadelphia Inquirer, in 2006. It later sold off several of the Knight Ridder papers.
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