Newspaper giant McClatchy, which is operating under Chapter 11 bankruptcy, has been able to put off contributions to its pension fund until January 2021 thanks to the CARES Act.

The owner of the Kansas City Star, the Miami Herald, the Charlotte Observer and 27 other media properties also received a tax refund of $11.7 million thanks to CARES, according to a Tuesday filing with the Securities and Exchange Commission.

McClatchy has already pledged to turn over 77 percent of that refund to the unsecured creditors, which counts Pension Benefit Guaranty Corp., as one of its largest unsecured creditors. The pension plan, which the PBGC is taking over, is said to have assets of $1.3 billion but is estimated to be underfunded by about $1 billion.

The company said it is still expecting to finalize its $312 million sale to the Chatham Asset Management hedge fund in September after a bankruptcy auction wrapped up earlier this month. Chatham, headed by Anthony Melchiorre, beat out Heath Freeman’s Alden Global Capital in the auction.

“As of June 28, 2020, we continue to face liquidity challenges relating to approximately $124.2 million in minimum required contributions that are due in the next 12 months to our Pension Plan” the company said in the SEC filing.

The company said it already had a standstill agreement in place with the Pension Benefit Guaranty Corp., going back to January 2020, when it was originally scheduled to make a $4 million contribution to the plan. When it entered into Chapter 11 in February, the obligations were further stayed.

The company said the CARES Act “delays all minimum required contributions due in calendar year 2020 until January 1, 2021. As a result, the notice of missed payment in January 2020 and our required contribution due in April 2020 no longer constitute missed contributions as of June 28, 2020.”

McClatchy reported a net loss of $34.7 million in the quarter compared to a $17.5 million loss in the year-ago period. McClatchy’s quarterly revenue for the period ending June 28 dropped by over $40 million to $131 million versus $178.7 million in the previous year’s quarter.

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