McClatchy Co., the organization behind Raleigh's own News & Observer, released a statement saying they filed for bankruptcy on Thursday, ending family control of America's second largest local news company.

The news organization said the move comes as part of a strategy to reposition themselves for a digital future by shedding the costs of their print legacy.

They said if the court accepts their plan a company named Chatham Asset Management LLC would operate McClatchy as a privately held company.

The release said more than 7 million shares of both publicly available and protected family-owned stock would be canceled.

Impact on the News & Observer

McClatchy's release said the filing would have no immediate impact on their employees. They manage 30 newsrooms in over 14 states, including the Charlotte Observer and the News & Observer.

Robyn Tomlin, McClatchy southeast regional editor and executive editor of The News & Observer and The Herald Sun, said it was business as usual in the two Triangle newsrooms Thursday.

"We remain fully focused on producing independent, local journalism that serves our communities, just as we have been for more than 150 years. Nothing about the news today changes our focus or mission. We appreciate the continued support of our readers and our community," Tomlin said.

Craig Forman, McClatchy’s chief executive officer, said, "A stronger capital structure will enable McClatchy to continue to pursue our strategy of digital transformation and continue to produce strong local journalism."

"Legacy companies carry large pension obligations that eat into cash flow and profits. McClatchy's qualified pension covers more than 24,000 current and future retirees -- many retired blue-collar workers who manned printing presses or loaded newspapers into delivery trucks -- supported by fewer than 2,800 active employees," wrote Kevin Hall in an article on McClatchy's website.

This news comes after a report from the Wall Street Journal of McClatchy skipping a $12 million debt-interest payment in January, when it attempted to negotiate with creditors to avoid a bankruptcy-court proceeding.

He said daily print circulation fell by 58.6 percent between 2006 and 2018.