Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed in a Current Report on Form 8-K filed by The McClatchy
Company (the "Company") on February 13, 2020 (the "Prior Form 8-K"), on February
13, 2020 (the "Petition Date"), the Company and certain of its subsidiaries
(together with the Company, the "Debtors") filed voluntary petitions (the
"Chapter 11 Cases") in the United States Bankruptcy Court for the Southern
District of New York (the "Bankruptcy Court") seeking relief under chapter 11 of
title 11 of the United States Code (the "Bankruptcy Code"). The Company
continues to operate its business as debtor-in-possession under the jurisdiction
of the Bankruptcy Court and in accordance with applicable provisions of the
Bankruptcy Code and the orders of the Bankruptcy Court.
Debtor-In-Possession Financing
In addition, as previously disclosed in the Prior Form 8-K, in connection with
the Chapter 11 Cases, the Debtors filed a motion on the Petition Date seeking
the Bankruptcy Court's approval of debtor-in-possession financing on the terms
set forth in that certain Debtor-in-Possession Credit Agreement (the "DIP Credit
Agreement") among Encina Business Credit, LLC, as administrative agent for each
member of the Lender Group and the Bank Product Providers, the Company, as a
debtor and debtor-in-possession, and certain of the Borrowers party thereto. The
terms of the DIP Credit Agreement were previously disclosed by the Company in
the Prior Form 8-K.
Pursuant to an order dated March 25, 2020, the Bankruptcy Court approved on a
final basis access for the Debtors to the aggregate principal amount of $50
million under the DIP Credit Agreement, subject to a borrowing base.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Vice President, Finance and Chief Financial Officer
On March 25, 2020, The McClatchy Company (the "Company") appointed Peter Farr,
56, as the Company's Vice President, Finance and Chief Financial Officer
effective March 30, 2020. Mr. Farr will continue to serve in his role as Chief
Accounting Officer. Mr. Farr has served as the Company's Corporate Controller
and Chief Accounting Officer since he joined the Company in April 2018. Prior to
that Mr. Farr held various finance roles at The Boeing Company beginning in 2008
and at Allianz SE from 2006. In connection with his new role, Mr. Farr's annual
base salary will increase to $500,000, effective March 30, 2020. As previously
announced, Elaine Lintecum will no longer serve as the Company's Vice President,
Finance and Chief Financial Officer effective March 30, 2020 and will serve as
special advisor to the Company's President and Chief Executive Officer until her
retirement from the Company on June 30, 2020.
Corporate Controller and Treasurer
In addition, the Company announced on the same date that Stephanie Zarate has
been appointed as the Company's Corporate Controller and Treasurer effective
March 30, 2020. Ms. Zarate will continue in her role as the Company's Investor
Relations Manager, a position she has held since 2016.
Chief Restructuring Officer
Effective March 25, 2020, the Bankruptcy Court approved the appointment of Sean
Harding as the Company's Chief Restructuring Officer. With the support of
additional personnel from FTI Consulting, Inc. ("FTI"), Mr. Harding will perform
the ordinary course duties of a chief restructuring officer in connection with
the Company's chapter 11 cases and related matters and will report directly to
the Company's board of directors.
Mr. Harding, age 45, is an experienced restructuring and turnaround executive.
He is a Senior Managing Director with FTI, which is a full-service financial
advisory firm specializing in interim management, restructuring advisory,
turnaround consulting, operational due diligence, and performance improvement
services across a broad range of industries. Mr. Harding has been employed by
FTI since 2002 and has served as a restructuring officer to a number of
companies. Mr. Harding is a Certified Turnaround Professional and serves on the
Board of the Atlanta, GA chapter of the Turnaround Management Association.
The services of Mr. Harding are being provided pursuant to a letter agreement
between the Company and FTI (the "Engagement Letter"), as may be modified by the
order entered by the Bankruptcy Court approving the retention. Under the terms
of the Engagement Letter, FTI will be entitled to compensation at specified
hourly rates for the services of Mr. Harding and other FTI personnel pursuant to
the Engagement Letter, as well as reimbursement for reasonable direct expenses.
Mr. Harding's services to the Company are billed by FTI, and he is not
separately compensated by the Company for serving as its Chief Restructuring
Officer. FTI is not an affiliate of the Company or any of its subsidiaries.
The foregoing summary of the Engagement Letter does not purport to be complete
and is qualified in its entirety by reference to the Engagement Letter, a copy
of which is attached as Exhibit 10.1 to this Current Report on Form 8-K and is
incorporated herein by reference.
Other than as noted above, there is no other arrangement or understanding
pursuant to which Mr. Harding was engaged as Chief Restructuring Officer of the
Company. Mr. Harding has neither family relationships nor related person
transactions with the Company in connection with his appointment as Chief
Restructuring Officer.
Item 7.01 Regulation FD Disclosure.
Effective immediately, the Company will no longer issue quarterly earnings press
releases and will no longer host quarterly investor conference calls. The
Company expects to report the financial results of its year ended December 29,
2019 in its Annual Report on Form 10-K on March 30, 2020.
The information furnished pursuant to Item 7.01 in this Current Report on Form
8-K is furnished herewith and shall not be deemed to be "filed" for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or otherwise subject to the liabilities of that section, and shall not be
deemed incorporated by reference into any filing made by the Company under the
Securities Act of 1933, as amended, or the Exchange Act, except as shall be
expressly set forth by specific reference in any such filing.
Item 8.01 Other Events.
On March 26, 2020, the Company issued a press release announcing the
appointments of Mr. Farr and Ms. Zarate as the Company's Vice President,
Finance and Chief Financial Officer and Corporate Controller and Treasurer,
respectively, as of March 30, 2020. A copy of the press release is attached as
Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
10.1 Engagement Letter, dated February 23, 2020, by and between The
McClatchy Company and FTI Consulting, Inc.
99.1 Press release dated March 26, 2020.
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