Hedge Funds Duel in Bankruptcy Court Over McClatchy Newspapers

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A battle of the hedge funds is brewing in the bankruptcy auction of the McClatchy Company, one of the nation’s largest and most decorated newspaper chains.

Chatham Asset Management, a New Jersey hedge fund, seemed to have an advantage going into the planned court-supervised sale of the newspaper company, which was scheduled to start on Wednesday, only to end up postponed.

Industry observers predicted that Chatham was likely to become the chain’s owner, because of a 2018 restructuring of McClatchy, the publisher of The Sacramento Bee, The Miami Herald and more than two dozen other newspapers. The refinancing of the company made Chatham — the principal owner of American Media Inc., the publisher of the National Enquirer supermarket tabloid — the largest debt holder in McClatchy.

Enter Alden Global Capital, a New York hedge fund that has become a major force in the newspaper business. In a surprise move on Wednesday, Alden filed an emergency motion in a U.S. Bankruptcy Court asking Judge Michael E. Wiles to stop Chatham from attempting to buy McClatchy through a credit bid, a transaction that would allow it to put the company debt it had assumed toward the purchase price.


Marc Tracy

2020-07-09 08:36:51

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