Newspaper publisher McClatchy Co. has filed for Chapter 11 bankruptcy protection as it seeks to restructure more than $700 million in debt.

The company publishes 30 newspapers including The Miami Herald, The Kansas City Star, and The Sacramento Bee.

Pending court approval, 60% of its debt would be eliminated and control of the company would be given to McClatchy’s largest creditor, the hedge fund, Chatham Asset Management.

Chatham Asset Management also owns a majority stake in the National Enquirer and Postmedia, the largest Canadian newspaper chain.

“When local media suffers in the face of industry challenges, communities suffer: polarization grows, civic connections fray, and borrowing costs rise for local governments,” chief executive officer Craig Forman said. “We are moving with speed and focus to benefit all our stakeholders and our communities.”

McClatchy said it has received $50 million debtor-in-possession financing from Encina Business Credit and would continue to operate the papers.

In court filings, it said it twice reached agreements on strategic transactions that would have reduced its leverage, but it was, “unable to come to agreeable terms on financing, leaving the transactions unexecutable.”

McClatchy said it was beginning the bankruptcy process following active restructuring negotiations with the Pension Benefit Guaranty Corporation to address its future pension obligations. It expects fourth-quarter revenues of $183.9 million, down 14% year-over-year. It expects 2019 revenue to be down 12.1% year-over-year, its sixth-consecutive year of declines.

McClatchy expects to pull its listing from the New York Stock Exchange and go private.

“While this is obviously a sad milestone after 163 years of family control, McClatchy remains a strong operating company and committed to essential local news and information,” said Kevin McClatchy, chairman of the company. “While we tried hard to avoid this step, there’s no question that the scale of our 75-year-old pension plan — with 10 pensioners for every single active employee — is a reflection of another economic era.”

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