Tribune Co., the biggest newspaper publisher in bankruptcy, will learn this week whether it has won the first of two rulings it needs to leave bankruptcy this year, the judge overseeing the case said.
U.S. Bankruptcy Judge Kevin Carey said today in a hearing in Wilmington, Delaware, that he has almost finished writing a 50-page opinion on Tribune’s proposal to divide ownership of the newspaper and television company among its senior lenders, including JPMorgan Chase & Co. (JPM:US), and hedge funds Oaktree Capital Management LP and Angelo, Gordon & Co. Carey said he plans to issue the decision by July 13.
“You’re not going to give us a hint?” Tribune attorney James Bendernagel asked, provoking laughter among the more than two dozen lawyers in the courtroom. Carey declined to say how he would rule.
If Carey approves the reorganization plan this month, Tribune may be able to exit bankruptcy by August, or by the end of the year at the latest, depending on how long it takes the Federal Communications Commission to make a key second ruling, Chief Reorganization Officer Don Liebentritt said last month.
Tribune finished the last major court hearing in its bankruptcy last month.
Should Carey approve the plan, the company still would need to win approval from the FCC to transfer its TV and radio licenses to the new owners before it could exit bankruptcy.
Tribune, based in Chicago, is trying for the second time to win approval of a reorganization plan that settles legal claims against the senior lenders that funded the company’s 2007 buyout, which some creditors said left the television and newspaper company insolvent.
Tribune owes creditors about $13 billion. The company is valued at more than $7 billion, Tribune said in court papers.
The case is In re Tribune Co., 08-bk-13141, U.S. Bankruptcy Court, District of Delaware (Wilmington).
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