Sacramento Mayor Darrell Steinberg has taken his campaign for local ownership of the Sacramento Bee to U.S. Bankruptcy Court, though the court may not be allowed consider his arguments.

The Bee’s owner, The McClatchy Company, filed for Chapter 11 protection in February while it restructures its pension obligations and more than $700 million of debt. McClatchy’s papers have continued to publish. But Steinberg has said during the bidding for McClatchy assets like the Bee, there may be an opportunity to pry his city’s paper loose from the group.

“The company is based here in Sacramento, yet the bankruptcy reorganization is being heard in New York City – far from the local markets that depend on this journalistic resource,” Steinberg wrote in a letter to Judge Michael E. Wiles, of the U.S. Bankruptcy Court for the Southern District of New York. “We seek to ensure that The Bee and McClatchy’s other California papers emerge from this process with California owners motivated primarily by a desire to serve the public interest, not the bottom line,” Steinberg wrote in the letter, filed with the court Tuesday.

The Bee has published more than 1,000 stories related to the coronavirus between the end of February and April 30, Steinberg said, and he called it the most significant source of original reporting in the community.

“It needs to be bolstered and rebuilt, not milked for whatever profit it can still produce,” Steinberg wrote.

McClatchy’s CEO said Tuesday afternoon he had no comment on Steinberg’s suggestions, but appreciates the mayor’s support.


“Sacramento Mayor Darrell Steinberg is a consistent advocate of a vibrant, independent local news media, even when that local media is critical of him — and that is to his great and enduring credit,” said Craig Forman, who is also company president.

A hedge fund, Chatham Asset Management, is the major lender and shareholder, and is expected to operate McClatchy as a private company, although other bidders for all or part of McClatchy are expected.

The Bee was the McClatchy family’s first paper in a chain that eventually grew to 30 nationwide and is one of the largest newspaper companies in the U.S., operating in 14 states. Along the way, McClatchy acquired 49.5% of The Seattle Times.

Other than certain exceptions related to railroads, U.S. bankruptcy law exists to handle debts. Neither the public interest nor even employee interests are part of the court’s considerations. The U.S. courts website says the only parties who have standing in bankruptcy cases are the person or business that has filed for bankruptcy relief, those who are owed money and the U.S. trustee or bankruptcy administrator.