RESEARCH TRIANGLE PARK – A federal bankruptcy judge on Tuesday approved the sale of the newspaper chain McClatchy to hedge fund Chatham Asset Management in a deal valued at $312 million.

McClatchy owns The News & Observer and The Herald Sun in the Triangle as well as the Charlotte Observer plus other newspapers across the country.

McClatchy bought The N&O in 1995 for $373 million, according to a report at the time from The Associated Press.

That deal brought to a close some 100 years of ownership of the newspaper by the Daniels family. At the time the N&O was among the emerging leaders in utilization of the internet.

“You want to be in a position that if you decide you want to sell something, you can sell it on your terms,″ Frank Daniels Jr., president and publisher of The News and Observer Publishing Co., said when the deals was announced.

Chatham has said that it plans to offer employees at the 30-newspaper chain their current jobs with the same pay and benefits, and it will honor collective bargaining agreements.

“The hedge fund offered to convert the more than $262 million it owns in McClatchy debt into equity in a Chatham-owned version of the company. It also agreed to throw in roughly $49 million in cash and will pay additional costs, including employee payroll, that McClatchy incurred since filing for bankruptcy,” The New York Times reported.

“After the sale becomes official — probably by September — Chatham will become the owner, and the publicly traded McClatchy will go private.”

Chairman Kevin McClatchy, CEO Craig Forman and their fellow board directors will step down when the deal closes by Sept. 30, the chain said in a statement. The deal would need the approval of a U.S. Bankruptcy Court judge, and a hearing is scheduled for Aug. 4.

“While it will be humbling to pass the torch, we want to thank our employees, readers, communities and Chatham for recognizing the value of the public-service role of local journalism and supporting its mission,” Kevin McClatchy said in a statement as reported by the Charlotte Observer.

McClatchy Co., which is headquartered in Sacramento, California, is one of the largest newspaper companies in the U.S. It also owns the Miami Herald and the Sacramento Bee. It filed for bankruptcy protection because of a heavy debt load stemming from its $4.5 billion purchase of the Knight-Ridder newspaper chain in 2006, just as the newspaper industry went into steep decline.