Bloomberg News

Tribune Noteholders Ask for Changes in Bankruptcy Ruling

November 16, 2011

(Updates with names of creditors in second paragraph.)

Nov. 15 (Bloomberg) -- Tribune Co. noteholders and other pre-buyout creditors asked a judge to reconsider part of his decision to reject two competing plans to reorganize the biggest media company in bankruptcy.

Aurelius Capital Management, Deutsche Bank Trust Co. Americas and Law Debenture Trust Co. of New York asked U.S. Bankruptcy Judge Kevin Carey to reconsider a handful of the rulings he made in the 125-page Oct. 31 decision. The groups also formally notified the court in Wilmington, Delaware, that they intend to appeal the ruling.

Carey rejected Tribune’s reorganization plan and a competing proposal by the noteholders. He approved the central piece of the company’s plan, a settlement with lenders led by JPMorgan Chase & Co.

The rulings the creditors want reconsidered involve the repayment status of debt-like securities known as Phones and a proposed litigation trust set up to file lawsuits related to Tribune’s 2007 buyout.

The two plans were backed by opposing groups of creditors. JPMorgan and the lenders who funded Tribune’s $8.2 billion buyout in 2007 supported a plan that would absolve them of most legal responsibility for the transaction.

Carey has presided over the case since it was filed in December 2008. Tribune, which is valued at about $6.75 billion, owes creditors about $13 billion, according to court records.

The Chicago-based newspaper and television company filed for bankruptcy one year after the buyout led by real-estate billionaire Sam Zell.

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

--Editors: Stephen Farr, Charles Carter

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

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net.


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