Bloomberg News

Tribune Judge Says He May Issue Bankruptcy Decision Today

November 01, 2011

(Updates with comment from judge in third paragraph.)

Oct. 31 (Bloomberg) -- The judge overseeing Tribune Co.’s bankruptcy said he may issue his opinion about two competing proposals for reorganizing the newspaper publisher this afternoon.

U.S. Bankruptcy Judge Kevin J. Carey in Wilmington, Delaware, told Tribune’s chief restructuring officer, Donald J. Liebentritt, at a hearing that the opinion the company and its creditors have waited months to see should be available today.

“I am hopeful something will be on the docket before you get to Washington,” Carey told Liebentritt, who said he would be taking a 4:30 p.m. train to Washington from Wilmington today. Carey didn’t say how he would rule.

Carey, who has presided over the case since it was filed in December 2008, has been asked to pick one of two plans to reorganize Tribune, which owes creditors about $13 billion, and is now worth $6.75 billion, according to court records.

The two plans were backed by opposing groups of creditors. The lenders who funded the $8.2 billion buyout support a plan that would absolve them of most legal responsibility for the transaction.

Pre-buyout creditors, who rank below lenders in repayment priority, backed a plan that would use lawsuits to raise money for them. Those suits would seek to change the repayment priority by moving pre-buyout creditors ahead of the lenders.

Under both plans, New York-based JPMorgan Chase & Co. and the other senior lenders would be Tribune’s majority owners. The Chicago-based company filed for bankruptcy about one year after a buyout led by real-estate billionaire Sam Zell.

While in bankruptcy, Tribune sold its stake in the Chicago Cubs baseball team. Tribune owns eight newspapers, including the Los Angeles Times and the Chicago Tribune, with a combined daily circulation of 1.9 million last year. The company’s 23 TV stations include sites in New York, Chicago and Los Angeles.

The bankruptcy case is In re Tribune Co., 08-bk-13141, U.S. Bankruptcy Court, District of Delaware (Wilmington).

--Editors: Stephen Farr, Michael Hytha

To contact the reporter on this story: Steven Church in Wilmington at schurch3@bloomberg.net

To contact the editor responsible for this story: Stephen Farr at sfarr@bloomberg.net


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