Bankruptcy can be a struggle but also an opportunity for many companies in North Carolina. Some of the nation’s most well-known corporations have gone through the Chapter 11 bankruptcy process of reorganization and emerged again, including Texaco, General Motors and Six Flags. One of the most well-known names in the U.S. newspaper business is planning to join them as McClatchy, the publisher of papers like The Miami Herald and The Kansas City Star, filed for bankruptcy restructuring on Feb. 13, 2020. The publishing company said it is unable to meet its obligations to employee pensions and creditors but that it will continue operations during the bankruptcy process.
In a statement, the company said it planned to reorganize and emerge from Chapter 11 bankruptcy in the months ahead. McClatchy said that it was negotiating with the Pension Benefit Guaranty Corporation, a federal insurance company that covers private pension plans, and its large creditors. The company expected that the insurer would take over its pension obligations in the years to come. The bankruptcy follows a period of growth for McClatchy, which purchased rival newspaper company Knight Ridder in 2006, although it later re-sold some of the Knight Ridder newspapers.
The bankruptcy announcement came as a prominent investor said that the newspaper industry is dying although he expected that several large papers like The Wall Street Journal and The New York Times would continue to publish. The newspaper industry has seen intense challenges as online outlets overtake print media and as readers, accustomed to an ad-supported model, hesitate to purchase a subscription to access online content.
Whether a company is working in a troubled industry or facing other issues with repaying creditors, Chapter 11 bankruptcy reorganization may be an option to help it move forward. A commercial bankruptcy attorney may advise business owners about their options.