Tuesday, November 1, 2011

Judge Irked Over Chi-Trib Ch. 11 Plans; Threatens to Name Bankruptcy Trustee

The Gothic Revival Tribune Tower in ChicagoImage via WikipediaIn his 126-page decision yesterday in  In re Tribune Co. (Case No. 08-bk-13141), a frustrated U.S. Bankruptcy Court for the District of Delaware Judge Kevin J. Carey threatened to place the Tribune Co in bankruptcy and appoint a Trustee, according to a report by Bloomberg News.

Judge Carey, who has presided over the nation's second-largest newspaper publisher's bankruptcy proceeding since the Tribune Co. filed a voluntary Chapter 11 bankruptcy in December 2008 (see related "TUOL" posts 3/29/10, 8/24/09), rejected rival re-organization plans submitted by JP Morgan Chase & Co. and  the Aurelius Capital Management LP hedge fund. Judge Carey criticized the former's plan for its over-broad release provisions and attacked the latter plan's treatment of senior lenders and release of non-debtor guarantors, according to the Bloomberg News account.

The multimedia Tribune Co. is valued at roughly $6.75 billion, but has debts exceeding $13 billion, according to court documents. Financier and former Tribune Co. owner Samuel Zelle oversaw the $13 billion leveraged buyout of the company in 2007.

Judge Carey has scheduled a status hearing for November 22.

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