McClatchy Co., the longtime parent of the Tri-City Herald and three other Washington dailies, has filed for bankruptcy. 

McClatchy and its 53 subsidiaries filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code in the U.S. District for Southern New York on Feb. 13. Chapter 11 allows companies to restructure or eliminate debt as they reorganize and continue to operate.  

The company’s 30 local newsrooms, including the Tri-City Herald, Tacoma News Tribune, Olympian and Bellingham Herald, are not immediately affected. 

“This restructuring is a necessary and positive step forward for the business, and the entire board of directors has made great efforts to ensure the company is able to operate as usual throughout this process,” said Kevin McClatchy, chairman of the board and great-great grandson of the company’s founder, James McClatchy, in a press release announcing the bankruptcy. 

“We are privileged to serve the 30 communities across the country that together make McClatchy and are ever grateful to all of our stakeholders – subscribers, readers, advertisers, vendors, investors and employees – who have enabled our legacy to date. We look forward to the continued success of such an outstanding group of colleagues long into the future." 

McClatchy is seeking approval from its secured lenders, bondholders and the Pension Benefit Guaranty Corporation for its restructuring plan, which includes replacing existing debt with new and exchanging debt for a 97 percent equity stake in the company. 

The deal ends the McClatchy family’s control of the company and places it in the hands of a hedge fund, Chatham Asset Management Inc. 

McClatchy shares stopped trading on the NYSE American stock exchange after closing at 75 cents on Feb. 12. Accounting for a 2016 reverse stock split, McClatchy shares topped out at nearly $750 in March 2005. 

McClatchy was widely expected to seek protection from creditors in bankruptcy court after the it missed a mandatory $124 million payment to its pension plan amid negotiations with creditors. Congress excluded it from a relief bill that would have extended the payment period.  

The $530 million it owes Pension Guarantee Corp. is its largest unsecured debt, according to its petition. 

The company listed assets between $500 million and $1 billion and up to $10 billion in liabilities. 

McClatchy bought the Tri-City daily in 1979.  

At one point, the Tri-City Herald's payroll topped 200 people. But steep declines in advertising and other revenue coupled with the company’s debt prompted stark cuts that trimmed the staff to fewer than 30 today. 

The paper has long occupied offices and production facilities at the corner of West Canal Drive and North Cascade Street in downtown Kennewick. 

Until last fall, it owned the complex from which it produced the region’s newspaper of record.  

A Pasco builder bought the property for $3.98 million on Oct. 18. 

As part of the deal, the newspaper agreed to lease a portion of the first floor for its roughly 25 employees for an additional 10 months. The buyer, D9 Construction Inc., plans to subdivide the 40,000-square-foot offices for lease to multiple tenants. It has not announced a tenant, and the Herald has not announced where it will move when the lease is up. 

The Herald is a daily online newspaper but stopped printing a Saturday edition in November. An electronic version is available online. 

For a detailed breakdown of the conditions that led to the bankruptcy, go to  tri-cityherald.com/news/nation-world/national/article240139933.html