in McClatchy, to the point where it became not only the companys largest shareholder but also its biggest creditor. Finra, the brokerage industrys main watchdog, subsequently concluded its review, and its unclear what if anything resulted from it. Blue Sky Digital Outdoor Advertising Fund Fund Data, Sarasin Ie Global Equity Opportunities (Usd) Fund Data, Themelios Ventures Ii-A, L.P. Fund Data. The announcement, which signals an end to 163 years of family ownership, underlines the growing influence of the finance industry on American newspapers. There, they tried to prevent him from pursuing a lawsuit accusing Chatham-backed iPayment and its board member Pecker of ousting him unfairly. Anyone can read what you share. Hedge fund manager Chatham Asset Management and founder Anthony Melchiorre agreed to pay $19.4 million to settle Securities and Exchange Commission charges that the firm improperly traded fixed-income securities, the SEC announced Monday. Freelance budgets have shrunk at Postmedia, and travel expenses have been severely curtailed, the people said. Chatham, which manages about $4 billion in assets on behalf of its clients, is expected to become the majority owner in the third quarter of the year, McClatchy said, and the publicly traded. The California state pension system has been planning to exit all of its hedge fund investments and has been asking Chatham to sell holdings so it can return about $200 million. The firms assets have doubled in the past three years. View Last Form Adv Compilation Report on Record, LIMIT THE USE OF MY SENSITIVE PERSONAL INFORMATION, % of top 20 holdings the same as top 20 most commonly held by all managers. Hedge funds and private equity firms have had a growing presence in the news industry, to the chagrin of press advocates who argue that financial firms do not make civic-minded stewards of a business built largely on holding the powerful to account. I have no regrets whatsoever about going with the monthly pension. Thats exactly what happened. New Jersey, which has generated a more-than 12% annualized return on its investment, is entitled to withdraw $355 million from one of Chathams funds at the end of this year. It doesnt produce a product or render a significant service to society. Named after the leafy suburb where its based, Chatham has posted average annual returns of about 10%, trouncing many of its competitors. Chatham Asset Management is a hedge fund with 13 clients and discretionary assets under management (AUM) of $8,608,297,054 (Form ADV from 2022-03-30). Thats just not how bond math works, said Michael Terwilliger, a portfolio manager at Resource Credit Income Fund. In that sense, they are perfect victims for scavengers. But Melchiorre? Journalists employed by McClatchy, as well as the mayors in Lexington, Ky.; Sacramento; and Miami three cities served by McClatchy papers pushed for local, civic-minded ownership of the chain. 2023 Fortune Media IP Limited. Fauci says the general public somehow didnt get his messaging that the vulnerable are really, really heavily On Thursday, Lyfts new CEO laid off over 1,000 employees. The expected deal to sell The Sacramento Bee, McClatchys flagship publication, and other newspapers to a New Jersey hedge fund will end 163 years of family ownership. Many hedge funds look to acquire companies that, while they may be failing, still generate a lot of cash. A similar story has unfolded at newspaper publisher McClatchy, which has posted annual losses since 2015. The hedge fund has become a major player in the news industry. Hedge fund manager Chatham Asset Management and founder Anthony Melchiorre agreed to pay $19.4 million to settle Securities and Exchange Commission charges that the firm improperly traded. Austin Weinstein Hedge fund Chatham Asset Management and its founder, Anthony Melchiorre, agreed to pay more than $19 million to settle US allegations that the firm improperly traded. Earlier this month, Alden secured a third seat out of seven on the Tribune Publishing board as it seemed to inch closer to taking control of that company. For the low-profile Chatham, American Media has become a high-profile headache. But Mr. MacLeod, the chief executive, acknowledged complaints about the cuts. The matter has been resolved and we are focused on generating returns for our investors.". Necessary cookies are absolutely essential for the website to function properly. Now he was working on behalf of Chatham Asset Management, a $4.3 billion hedge fund that owns the National Enquirer. In 2013, former New Jersey Gov. After years of declines in revenue and print circulation, the McClatchy Company, one of the largest and most respected news publishers in the country, announced on Sunday that it expected to be bought by Chatham Asset Management, a New Jersey hedge fund, at the conclusion of a bankruptcy auction. Chatham Asset Management to Pay $19.3M to Settle SEC Charges. Aiysha Johnson will take the helm of the 13,000-plus member organization following Ralph Albert Thomas' June retirement. Postmedia, where Pecker sat on the board until last August, has posted annual losses for most of the past decade. In all three cases, Chatham bought most of the subordinated bonds, plus stock. The owner, (whose only hope to save journalism in this second or third tier town), is digital publishinghas no web site! You also have the option to opt-out of these cookies. A year later, 3 grads CA Notice at Collection and Privacy Notice, Do Not Sell/Share My Personal Information. Alt Turnover is calculated by taking either the total MV of new purchases or A Chicago-area kid who studied economics at Northwestern and got an MBA from the University of Chicago, his high-toned education didn't reduce the intensity of the former high-school football star. All Rights Reserved. Enter your email address to subscribe to this blog and receive notifications of new posts by email. That kind of showing helped the firm attract $300 million from investors this quarter, a person familiar with the matter said. Good writing. John Kasichs appointeescommitted$125 million to Chatham. Apr 3, 2023. During the last five years, taxpayers in New Jersey, Ohio and California have owned large financial stakes in the owner of the media company that allegedly helped the Trump campaign bury negative stories, according to documents reviewed by Capital & Main and MapLight. Its pretty frustrating, said Brian Gibson, the president of the local union that represents 140 members of the editorial staff at Postmedias Vancouver papers. to see more advanced email alert options such as selecting any type of Sign up for your daily digest of New Jersey News. Homes for sale in Grasse, France have an average listing price of $1,650,490 and range in price between $498,470 and $19,828,038. It declined to comment further. After Grimstad filed his suit, the Chatham camp countered, claiming Grimstad had used company money to pay a Las Vegas escort $4,000 for sexual activities and later hired her and her mother. This category only includes cookies that ensures basic functionalities and security features of the website. What it does, apparently, is make its clients lots of money. Alden controls roughly 200 outlets through its newspaper chain, MediaNews Group. The ugly litigation with the tech executive was resolved with a less-than-remorseful apology and a multimillion-dollar payday for Grimstad. Terms & Conditions. At least five other traders whove looked at the bonds say their prices seem too good to be true. Since Chatham took a majority stake in Postmedia, the company has cut its work force, shuttered papers across Canada, reduced salaries and benefits, and centralized editorial operations in a way that has made parts of its 106 newspapers into clones of one another. I can almost guarantee you there will be staff cuts at most or all of those newspapers. The firms assets have doubled in the past three years. From shortly after the merger to the end of 2018, McClatchys work force was cut from more than 15,000 full-time employees to around 3,300, according to public filings. Anyone can read what you share. Chrome Extension. Washington, D.C.--(Newsfile Corp. - April 3, 2023) - The Securities and Exchange Commission today charged New Jersey-based Chatham Asset Management LLC and its founder, Anthony Melchiorre, in . 130 E. Randolph St. Clearly, the writing is on the digital wall. Last week, that kind of financial maneuvering reappeared in another major newspaper deal, when Chatham emerged as the winning bidder in a bankruptcy auction for the McClatchy Company, a chain with 30 media outlets including The Miami Herald, The Kansas City Star and The Sacramento Bee. Thats just not how bond math works, said Michael Terwilliger, a portfolio manager at Resource Credit Income Fund. With this significant deleveraging and potential additional synergies to be realized with other Chatham portfolio companies, we would anticipate to refinance the capital structure at more favorable rates and lower the companys cash interest payments by approximately $100 million to $150 million per year on a pro forma basis, thereby substantially enhancing the companys financial flexibility.. In 2013 and 2014, an Ohio pension system partially controlled by Gov. The information you requested is not available at this time, please check back again soon. Hedge Fund He set up his hedge fund in Chatham, N.J., in 2002. I wouldnt even begin to consider owning it at that level. Whalewisdom has at least 9 13F filings, 19 13D filings, 29 13G filings, and 127 Form 4 filings. Sad. A March 2019 Fortune magazine story said Melchiorre, who is either 51 or 52, was raised in Chicago, studied economics at Northwestern and got an MBA from the University of Chicago. Despite the companys financial distress, its bonds traded near par until December, and after dropping, have been climbing back. These cookies will be stored in your browser only with your consent. The SEC order found that these trades were executed at prices Chatham and Mr. Melchiorre proposed and had the effect of increasing the price of the AMI bonds at a significantly higher rate than the prices of similar securities. Sort: $5,409,230. Still, Chatham can elect one-third of Postmedias board, and it has debt covenants that give it huge sway over its long-term plans. The hedge fund is run by Anthony Melchiorre, a GOP donor whoreportedlymetwith the president and AMI CEO David Pecker at the White House soon after Trump took office. In all three cases, Chatham bought most of the subordinated bonds, plus stock. In the interest letter to Vericast CEO John OMalley, Chantham Managing Member Anthony Melchiorre detailed CAMs longstanding investments in the company, including: We are prepared to support any financing requirements for this transaction by subordinating some of our debt interests into subordinated notes or equity, thereby reducing the companys net leverage by up to 2.0x, Melchiorre wrote. Fortune said Melchiorre wasnt a particularly good fit at the firm and irritated some senior executives. Price swings on the trades described in the lawsuit marked the biggest-ever percentage changes in those securities, data reviewed by Bloomberg show. Chatham itself has been undergoing its first ever exam by the SECs inspections division, according to people familiar with the 16-year-old firm. And as it happened, the hedge fund owned the tabloid, the National Enquirer, that he had just used to try and catch and kill stories about the future president. And in 2006, when McClatchy bought out Knight Ridder, McClatchy C.E.O. Before long, the Chatham camp would make good on its threat against that executive, unleashing a tale of sex and money worthy of the Enquirer. State officials are well-positioned and duty-bound to investigate allegations of potential wrongdoing in hedge fund portfolios, said former Securities and Exchange Commission attorney Edward Siedle. With roots going back to 1857, McClatchy, a consistent winner of top journalism awards, was one of the last major family-run news publishers. Like Warren Buffett, Wall Street traders and just about everyone else, Chatham has no illusions about where the newspaper industry is headed; it just wants to bleed them of cash, or, perhaps, sell them at a nice profit to another chain. Its no wonder Chathams side would enlist Cohen, long known for his doggedness on behalf of Trump. You are limited to the prior 8 quarters of 13F filings. Chatham is a hedge fund, and, like most hedge funds, it is interested in just one thing: Big bucks. By clicking Accept, you consent to the use of ALL the cookies. The SEC has increased its focus on the valuation of securities across the market, said Jacob Frenkel, a lawyer at Dickinson Wright. The hedge fundfinalized its dealto buy an ownership stake in AMI in the summer of 2014. After he departed amid a round of layoffs, Melchiorre quit Manhattan to join the Jersey Boys, a clique of hedge funders across the Hudson River that included billionaires Cooperman and David Tepper. Location Chatham, New Jersey, United States; Regions Greater New York Area, East Coast, Northeastern US; A Chicago-area kid who studied economics at Northwestern and got an MBA from the University of Chicago, his high-toned education didnt reduce the intensity of the former high-school football star. . Two other old-line media investments, Postmedia Network Canada Corp. and McClatchy Co., have become central to Chatham and its thesis that itll make money in an industry others are fleeing. And it means that a news company known for winning top journalism prizes is likely to become the property of a firm that owns The National Enquirer and other supermarket tabloids. The deal happened so quietly that Postmedias own financial news site described it as a debt restructuring in a report that included a single mention of Chatham as one of the investors.. The New Jersey office building in which Chatham Asset Management has its office. Chatham Asset Management, LLC Anthony Melchiorre Managing Member Dear Mr. Melchiorre, We are writing to follow up on our discussions with regards to your non-binding, conditional indication of interest to acquire R. R. Donnelley & Sons Company. Then theres American Media. Which is concerning., Under Hedge Fund Set to Own McClatchy, Canadian Newspapers Endured Big Cuts, https://www.nytimes.com/2020/07/16/business/media/hedge-fund-chatham-mcclatchy-postmedia-newspapers.html. Since 2017, Postmedia has paid out over $6.2 million Canadian, or about $4.5 million, in bonuses to its five top executives, including Mr. MacLeod, the chief executive, and Paul Godfrey, the executive chairman of the board. Postmedia (along with its external counsel) is strongly of the view that there has been no contravention of the Competition Act with respect to this matter, Phyllise Gelfand, a Postmedia spokeswoman, said in a statement. McClatchy, the publisher of The Miami Herald, The Kansas City Star, The Charlotte Observer and its flagship publication, The Sacramento Bee, filed for Chapter 11 bankruptcy protection in February. With McClatchy, the hedge fund also designed a trade aimed at reaping a windfall through credit-default swaps. "As a result, during the relevant period, the NAVs of Chatham's clients were higher than they would have been if the subject trades were removed from the market for the AMI bonds, which, in turn, resulted in higher fees being charged to the clients," the SEC said. Main Office Any statement or implication otherwise is false. Chatham hasnt denied Cohens participation in the meeting. Washington D.C., April 3, 2023 The Securities and Exchange Commission today charged New Jersey-based Chatham Asset Management LLC and its founder, Anthony Melchiorre, in connection with improper trading of certain fixed income securities. If asked to vote, I can assure you I will be voting for us to divest, he said. Chatham owns the majority of Postmedia shares and the debt, but because of a Canadian law that limits non-Canadian control of media properties, it cannot exercise full control over the business. Chatham Asset Management . Chatham took on more American Media debt in recent months, getting Seaport to arrange a deal after Credit Suisse Group AG got cold feet amid public furor over the publishers antics in the 2016 presidential election. The two parties also agreed jointly and severally to pay $11 million in disgorgement and about $3.4 million in prejudgment interest, and civil penalties of $4.4 million and $600,000, respectively. After sparking federal prosecutors ire for its role in burying Trumps secrets shortly before the 2016 election, the company has drawn international attention for its war with Jeff Bezos over its expos of his extramarital affair. Start Free Trial . email address below and choose 'Submit'. Chatham Asset Management LLC, a private investment firm headquartered in Chatham, on May 16 submitted a letter of interest to acquire San Antonio-based Vericast from MacAndrews & Forbes Inc. for roughly $2.85 billion. Chatham and Melchiorre agreed jointly and severally to pay $11 million in disgorgement and around $3.4 million in prejudgment interest. McClatchy did not disclose terms. In a statement, Craig Forman, the McClatchy chief executive, said Chatham would allow the company to continue providing strong news coverage. Local journalism has never been more vital, Mr. Forman said, and we remain steadfast in our commitment to delivering on our mission and continuing to serve our communities.. Playing tough is the Chatham way. The consultant reviewed Chatham's trading annually for compliance with applicable laws and did not alert the firm to any issues. Two other old-line media investments, Postmedia Network Canada Corp. and McClatchy Co., have become central to Chatham and its thesis that itll make money in an industry others are fleeing. for CHATHAM ASSET MANAGEMENT, LLC, Top 20 equal-weighted holdings. This much is sure: Chatham founder Melchiorre, 51, has a formidable reputation. Wall Streets main regulator has been looking into opaque markets since the financial crisis, uncovering a wide swath of bad behavior from lying salespeople to bogus quotes from brokers. Seaport Global defended its practices. As far as leadership goes, I feel like the way they talk about it, were almost operating like a sales agency, not a news service, Mr. Gibson, the union leader, said. Sign up and get the best of News delivered straight to your email inbox, free of charge. Photographer: Luke Sharrett/Bloomberg (The most memorable thing he said was Disney would not be selling the papers anytime soon, but they were on the block a year later.). Chatham investors say that even if authorities go after the National Enquirer for allegedly extorting Bezos or for catch-and-kill tactics, American Media is a valuable company, with several magazines it could sell to raise money for creditors. Download 13F Summary Over time, Chatham has increased its investment (and sunk its teeth?) Anthony Melchiorre has an ownership stake in Chatham Asset Management, LLC of between 50% and 75%. After sinking their claws into such companies, they suck out the cash and invest the money elsewhere, where they can get better, surer returns. Investment Advisor Chatham Asset Management is based out of Chatham. No, I dont think hell be visiting the newsroom and talking about Chathams plans for the paper. Thats because they are losing to him.. I wouldnt even begin to consider owning it at that level. The firm and its founder, Anthony Melchiorre, have a reputation for hard-edged business. Grimstad claimed Chatham artificially drove down the price of the bonds by almost 30 percent in a single trade, effectively blocking a debt-restructuring effort so it could capture control of the company. Sign-up Any McClatchy employees hoping that Chatham might not be as bad as the hedge fund Alden Global Capital, which has decimated the Denver Post and other papers in its stranglehold, should consider this: Chatham is the majority owner of American Media, which owns the tabloid National Enquirer which hardly recommends Chatham as a potential restorer of the 29-paper chain to the newspaper industrys top ranks. Under Chatham, Postmedia has consolidated editorial operations to create what company insiders call common pages. National and political coverage is often prepared at a central site, and content from The National Post is inserted into newspapers across Postmedia. An SEC spokesman declined to comment. Search Crunchbase. An award-winning team of journalists, designers, and videographers who tell brand stories through Fast Company's distinctive lens, The future of innovation and technology in government for the greater good, Fast Company's annual ranking of businesses that are making an outsize impact, Leaders who are shaping the future of business in creative ways, New workplaces, new food sources, new medicine--even an entirely new economic system. Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors. CHATHAM ASSET HIGH YIELD OFFSHORE FUND, LTD. CHATHAM ASSET PARTNERS HIGH YIELD FUND, L.P. Anthony Melchiorre is the Founder & Managing Member of Chatham Asset Management. CHATHAM, NJ Importantly, the trading occurred more than four years ago in funds that have since been closed. The SECs order also finds that Chatham and Melchiorre calculated the net asset values, or NAVs, of their client funds holdings using pricing data that was based, in part, on the trading prices of the securities. Alden Global Capital controls roughly 200 outlets through its newspaper chain, MediaNews Group. After sparking federal prosecutors ire for its role in burying Trumps secrets shortly before the 2016 election, the company has drawn international attention for its war with Jeff Bezos over its expos of his extramarital affair. The SEC would like to thank the Financial Industry Regulatory Authority for its assistance with this matter. In all, the two companies closed 36 of the 41 newspapers that were part of the unusual deal, resulting in 291 job losses. The private equity fund Fortress Investment Group controls the largest American newspaper chain, Gannett, which publishes USA Today, The Arizona Republic and 250 other dailies. JimmyCsays: At the juncture of journalism and daily life in KC, Theres clarity in the St. Louis Post-Dispatchs futureFor The Star, just a bighaze. Chatham's and Mr. Melchiorre's trading in the AMI bonds accounted for the vast majority of trading in those securities and therefore over time had a material effect on their pricing, according to the SEC. Even before the pandemic, Postmedia saw a falloff in advertising, once the lifeblood of newspapers. This story was co-published with MapLight and Capital & Main. Jay Youngdahl, a former Harvard researcher who has served as a steelworkers pension trustee, said state officials may be able to take action to try to protect retiree investments. Chatham Asset Management LLC and its founder Anthony Melchiorre have agreed to pay more than $19.3 million to settle charges in connection with improper . An SEC spokesman declined to comment. Cohens assignment: Get Carl Grimstad, the recently fired CEO of payments processor iPayment Holdings, to the table. For the sake of McClatchys approximately 2,800 employees (for comparisons sake, The Star alone had more than 2,000 employees about 20 years ago), Im sorry to say things could get a lot worse before theres any chance of getting better. Subscribe to WhaleWisdom to view all filing data It declined to comment further. As part of it, Postmedia traded 17 of its papers to Torstar in exchange for 24 Torstar papers. "As our order finds, Chathams trading in AMI bonds had the effect of increasing the prices of those generally illiquid securities in a way that was disconnected from economic reality," said Sanjay Wadhwa, Deputy Director of the SECs Division of Enforcement. Hes a street fighter, said Mike Rankowitz, his boss at Morgan Stanley. Offers may be subject to change without notice. Chatham said at the time that the allegations were baseless and without merit. They wanted to kill a lawsuit by the former head of another Chatham company. The 2016 presidential campaign had just ended, and Michael Cohen was fresh off handling hush money for Donald Trump. containing a link to download the .zip file of the CSV file(s) you requested. To contact the reporters on this story: Katherine Burton in New York at kburton@bloomberg.net;Sridhar Natarajan in New York at snatarajan15@bloomberg.net;Shahien Nasiripour in New York at snasiripour1@bloomberg.net, To contact the editors responsible for this story: Caroline Salas Gage at csalas1@bloomberg.net, ;David Gillen at dgillen3@bloomberg.net, David Scheer, Canada joins U.S., U.K. in diplomatic boycott of Beijing games, Canada's ambassador to China steps down after Huawei crisis, Trudeau weighs auto-content rules as next U.S. trade flashpoint. Thats exactly what happened. Hedge funds are certainly profit-oriented, Mr. Longo said. At least one executivethe one Cohen and Pecker sparred withhas accused the New Jersey firm of market manipulation. After stints at Donaldson, Lufkin & Jenrette and Goldman Sachs Group Inc., Melchiorre landed at Morgan Stanley in 1998 where he rose to head the junk-bond trading group. of the acquiring company to visit the newsrooms of the papers being bought and to speak about the companys plans for the future and answer employees questions. And given the strains in the print-media business, the strong price of the debt is difficult to explain, traders say. Federal regulators have been asking questions, too. It needs to be bolstered and rebuilt, not milked for whatever profit it can still produce., Chatham Hedge Fund Has the Winning Bid for McClatchy Newspapers, https://www.nytimes.com/2020/07/12/business/media/hedge-fund-mcclatchy-newspapers.html. FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. Shortly after, Postmedia announced it would shut down all 24 newsrooms it had acquired, except for one, according to public filings. Performance After several stints at elite firms like Goldman Sachs and Morgan Stanley, he was let go from Morgan Stanley in 2002 as part of a sweeping round of layoffs. Under Republican governors, the two states committed at least $625 million of pension cash into Chatham Asset Management, a high-risk hedge fund that has taken control of theNational Enquirers parent company, American Media Inc., which is at the center of the federal investigation into President Donald Trumps 2016 campaign. He built his stature as a temperamental money-maker at the white-shoe firm.
