SAN FRANCISCO – A California judge is siding with a former chief executive of the McClatchy newspaper chain and other company officials in a lawsuit alleging they mismanaged funds by buying a rival newspaper publisher and failing to diversify investments.
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San Francisco Superior Court Judge Richard Ulmer said Tuesday that the officials were obligated to keep the company’s stock rather than sell it to invest elsewhere. He also says acquiring the Knight Ridder newspaper chain may have allowed McClatchy to survive the Great Recession.
The decision came in a lawsuit by Carlos McClatchy, a beneficiary of a McClatchy trust fund. His attorney, Mark Mosley, didn’t immediately return a telephone message seeking comment.
The lawsuit named Gary Pruitt, who was McClatchy’s CEO during the acquisition and is now CEO of The Associated Press.
