“#Newspaper giant McClatchy gets reprieve on pensions due to COVID-19”
August 18, 2020 | 12:43pm
The owner of the Kansas City Star, the Miami Herald, the Charlotte Observer and 27 other media properties also received a tax refund of $11.7 million thanks to CARES, according to a Tuesday filing with the Securities and Exchange Commission.
McClatchy has already pledged to turn over 77 percent of that to the Pension Benefit Guaranty Corp. which is taking over its pension plan. The plan is said to have assets of $1.4 billion but is estimated to be underfunded by about $1 billion.
The company said it is still expecting to finalize its $312 million sale to the Chatham Asset Management hedge fund in September after a bankruptcy auction wrapped up earlier this month. Chatham, headed by Anthony Melchiorre, beat out Heath Freeman’s Alden Global Capital in the auction.
The company said it already had a standstill agreement in place with the Pension Benefit Guaranty Corp., going back to January 2020 when it was originally scheduled to make a $4 million contribution to the plan. When it entered into Chapter 11 in February the obligations were further stayed.
The company said that the CARES Act “delays all minimum required contributions due in calendar year 2020 until January 1, 2021. As a result, the notice of missed payment in January 2020 and our required contribution due in April 2020 no longer constitute missed contributions as of June 28, 2020.”
McClatchy reported a net loss of $34.7 million in the quarter compared to $17.5 million loss in the year-ago period. McClatchy’s quarterly revenue for the period ending June 28 dropped by over $40 million to $131 million versus $178.7 million in the previous year’s quarter.
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