Friday, August 24, 2012

Not So Fast: Chicago Trib Still Hasn't Crossed Bankruptcy Finish Line

CHICAGO, IL - JUNE 07: The Tribune Tower, head...(Image credit: Getty Images via @daylife)U.S. Bankruptcy Court Judge Kevin J. Carey this week granted a stay of his confirmation order last month that would enable The Chicago Tribune to emerge from Chapter 11 bankruptcy (see "TUOL" post 7/16/12), but for the "time out" to continue, creditor Aurelius Capital Management ("ACM"), which is appealing the media conglomerate's reorganization plan, must post a $1.5 billion bond by August 29, the Tribune reports.

It's uncertain whether junior creditor ACM has the will or the way to rustle up the bond money to continue its appeal of the reorganization plan that gives senior creditors ownership of the Tribune Co. The conglomerate, which filed for bankruptcy in December 2008 (In re Tribune Co., Case No. 08-bk-13141), has  rung up more than $400 million in attorneys' fees wending its way through insolvency.

If the ACM appeal fizzles and the stay is lifted, the Tribune Co. must still garner FCC approval of its transfer of its television and radio properties, which include WGN-TV, to the new owners. According to the Tribune article, the conglomerate also must secure  $1.1 billion in debt financing and a credit line.
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