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A federal judge yesterday cleared several potential obstacles to McClatchy Co.’s effort to quickly exit bankruptcy, and a lawyer for the company’s least-protected creditors pulled back from a threat to seek a court-ordered search of records from the proposed new owner of the local news company, McClatchyDC.com reported. Judge Michael E. Wiles, who sits on the U.S. Bankruptcy Court for the Southern District of New York, approved motions by McClatchy’s lawyers to pay the company’s current employees, service providers and suppliers, and to pay utility companies to keep the lights on at properties nationwide. With those milestones out of the way, the focus turns to mediation proceedings, which began Friday. Mediation is designed to narrow differences between McClatchy and its creditors. A proposed deal between McClatchy and Chatham Asset Management would allow the nation’s second-largest local news company to shed about 55 percent of its debt and become a new privately held company.

The judge overseeing EP Energy Corp. ’s bankruptcy signed off Friday on a $3.3 billion debt-cutting plan, ruling against senior bondholders who said the drilling company’s business projections are too optimistic, WSJ Pro Bankruptcy reported. Judge Marvin Isgur of the U.S. Bankruptcy Court in Houston said on Friday he would approve the restructuring proposal, which turns junior creditors Apollo Global Management Inc. and Elliott Management Corp. into controlling shareholders of EP Energy, the largest U.S. energy producer to file for chapter 11 protection since 2016. The ruling followed a multi-day trial in which senior bondholders and other unhappy creditors challenged EP Energy’s strategy and said the bankruptcy plan wasn’t feasible. In part, they pointed to the recent coronavirus epidemic and its devastating impact on oil prices to argue that EP Energy was unlikely to meet financial projections once it exited bankruptcy. Fidelity Management & Research Co., JPMorgan Chase & Co. and other senior bondholders also said they were being underpaid, demanding nearly $178 million in premium payments on top of $1 billion in bond principal. EP Energy’s plan reinstates their debt claims, but without the extra premiums. Judge Isgur said forcing EP Energy to pay the premiums would amount to a penalty on its decision to seek chapter 11 protection, “which is inconsistent with the public policy of the country, inconsistent with what everyone has assumed is true in bankruptcy.”