Bankruptcy judge OKs McClatchy’s sales plan, initial bids are due this week

A federal bankruptcy judge has approved McClatchy Co.’s rules for potential buyers, and the company, which owns the Idaho Statesman, said all interested parties are ready to submit initial bids by early this week.

McClatchy and its two largest creditors announced in mid-April that the company was initiating a sales process as negotiations over a restructuring plan lagged. The company said it has had preliminary discussions with 20 potential buyers.

But Judge Michael E. Wiles slowed the process the week before last when he ordered the company and creditors, big and small, to come back to him with agreed upon bid procedures and a timetable. A detailed compromise was offered in court filings late Tuesday and, on Thursday afternoon, Wiles agreed to it with some minor stipulations.

Lawyers representing creditors weighed in at a hearing Thursday to confirm a timetable that would have the company close the door on final bids and good-faith deposits July 1 and reach a deal by July 15. An auction would be held July 8 if more than one qualified bidder emerges.

The company had proposed that the judge sign off on a sale July 23. But, in a moment of courtroom levity, Wiles said that final date was problematic.

“That’s my birthday, I would rather do it July 24,” Wiles said, prompting Van C. Durrer II, the lead bankruptcy lawyer for McClatchy, to agree on the date change with a caveat.

“We hope you will be over the hangover by the 24th.”

References in court filings suggest that the Sacramento, California-based company wants to leave time for possible Justice Department review of any deal for the nation’s second largest local news company. That would be required only if another large media company were to emerge as the buyer, as they could own newspapers or television stations in some of McClatchy’s 30 markets, creating fears of a monopoly.