Feb. 28, 2020 – The NewsGuild-CWA has won a spot on the McClatchy Creditors Committee, which represents the interests of employees and other groups in bankruptcy court proceedings and in negotiations with the company. TNG-CWA Executive Vice President Marian Needham will serve as the Guild representative.
In addition to the NewsGuild, other parties represented on the 7-member committee include former company executives, newspaper carriers involved in a class action lawsuit against the company, vendors, uncollateralized lenders and the Pension Benefit Guaranty Corporation (PBGC).
The PBGC’s claim of $530 million is by far the largest. It is the result of McClatchy’s request for permission to end its pension plan, which is underfunded by that amount. If McClatchy is permitted to terminate the plan, the company would transfer the plan’s frozen assets and its obligations to the PBGC. The PBGC would also assume responsibility for administering the plan.
Other members of the Creditors Committee include Anthony Ridder, who will represent executives whose supplemental pension payments went unpaid before McClatchy declared bankruptcy. Also on the committee is Lori Sawin, the lead plaintiff in a longstanding legal suit filed by a group of carriers who allege they were misclassified as independent contractors and are owed wages and benefits. Other committee members include an indenture trustee (Wilmington Savings Fund Society) who will act on behalf of unsecured bondholders, Wipro Limited, and Dow Jones & Company.
At its organizing meeting Wednesday, the group hired legal counsel – Stroock & Stroock & Lavan LLP – and financial advisors to represent the Creditors Committee. The meetings and discussions of the creditors committee are confidential, but its positions become public when the committee files papers or appears and advances arguments in the bankruptcy court. The Bankruptcy Code provides that a creditors committee, among other things, may consult with the company, investigate the company, and negotiate concerning a plan of reorganization. The plan of reorganization is the legal document that stipulates how a company will emerge from bankruptcy.
The Company has not suggested in any filings in the bankruptcy case that it plans to utilize bankruptcy law to change existing collective bargaining agreements. In a message to employees, the company stated that employees “will be paid as usual throughout the restructuring process.”
Further, ERISA, the federal law that governs pensions, protects the vested benefits of pension plan participants.
The Guild will provide a more detailed Q and A on the bankruptcy in the next few days.