Judge who handled Tribune Co. bankruptcy appointed to mediate in McClatchy case
The judge who presided over media giant Tribune Co.’s bankruptcy was appointed Tuesday to resolve differences among McClatchy Co., its creditors and the government agency being asked to take over administration of company pensions.
Judge Michael E. Wiles named recently retired Judge Kevin Carey, who handled bankruptcy cases for almost two decades, as the mediator for talks scheduled to begin no earlier than March 4.
Carey was on the bench for the 2008 bankruptcy of Tribune, which emerged four years later and spun off its newspaper holdings under the new name Tribune Publishing.
McClatchy, the nation’s second-largest local media company, filed for Chapter 11 bankruptcy on Feb. 13 in New York. The next day, the company and the hedge funds that own the largest amount of its debt asked Wiles to immediately appoint a mediator. The judge ordered mediation on Feb. 18 and told the parties to try to agree on a mediator.
McClatchy has told the judge it hopes to quickly emerge as a privately held company owned by Chatham Asset Management, a New Jersey hedge fund, and a collection of smaller creditors. The company would shed 55 percent of its debt but no longer be controlled by the McClatchy family, which has owned it for 163 years after its founding in Sacramento.
The restructuring plan requires agreement among a wide range of creditors big and small, including the government pension agency.
McClatchy and its largest creditors had requested a retired bankruptcy judge in New York as a mediator, but the Pension Benefit Guaranty Corporation objected and wanted the right to suggest its own mediator. The sides eventually agreed on Carey, a bankruptcy veteran.
In mediation, all parties ask the mediator to help work out differences in areas where agreement is elusive. The mediator’s rulings are later submitted to the presiding judge, who must determine whether to approve the broader plans for a company to exit bankruptcy.
Wiles’ order does not specify a time frame for the mediation. Once Carey has made a final determination, his brief report must be filed to the bankruptcy docket within five days of conclusion.
Oral discussions, materials and evidence before Carey are to remain confidential, the order says.
Carey retired Aug. 31 from the U.S. Bankruptcy Court for the District of Delaware, where he had served for 14 years. Prior to that he served five years on the U.S. Bankruptcy Court for the Eastern District of Pennsylvania.
Upon retirement, he went to work in Philadelphia for the insolvency and restructuring practice of Hogan Lovells, a giant international firm.
Carey’s bio page on the law firm’s website said that, in addition to the Tribune case, he presided over the bankruptcy proceedings for failed subprime mortgage lender New Century Financial. It said he authored more than 200 decisions as a bankruptcy judge.
This story was originally published February 25, 2020 at 12:46 PM with the headline "Judge who handled Tribune Co. bankruptcy appointed to mediate in McClatchy case."
