Federal bankruptcy Judge Michael Wiles approved the deal as expected at a remote hearing on Tuesday, but by flashlight after the power failed in his Westchester home.
Chatham, majority owner of the National Enquirer, US Weekly and other titles at American Media, won the right to take over McClatchy at a bankruptcy auction on July 10, beating out Heath Freeman’s Alden Global Capital, including with plans to inject $49 million in cash.
Chatham also pledged no layoffs or pay cuts and to honor all existing collective-bargaining agreements.
The Pension Benefit Guaranty Corp., which had earlier been pushing for a stake in the new company in return for assuming the $1.4 billion in pension obligations that helped trigger the bankruptcy, has agreed to be satisfied with only a $1 million contribution. Pensioners are likely to see their benefits cut as a result, sources said.
The unsecured-creditors committee also agreed to take a small contribution to settle its debt.
McClatchy CEO Craig Forman said he will step down when the deal is finalized, which is expected to happen next month.
“This is a major milestone towards McClatchy’s successful resolutions of its court-supervised reorganization process and towards the sustainability of independent local journalism in the 30 communities we serve,” he said.