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Published on Sunday, 13 February 2011 09:28
This year, US Bankruptcy Court Judge Kevin Carey asked all of the Tribune Company creditors to vote on which of the proposed reorganization plans for the bankrupt Chicago-based media company they felt was best. As of Friday, the votes are in and as expected, the votes fell along the lines of creditor alliances that proposed the plans and the ones that benefit themselves the best. The Tribune Company proposed reorganization plan was approved by the holders of the Senior Loan Claims and the Bridge Loan Claims, while the plan submitted by Aurelius Capital Management was approved by the holders of the Senior Noteholder Claims and lower-ranking creditors. Both plans achieved the minimum number of votes under US bankruptcy law to be considered eligible for confirmation.
The end of the long TribCo bankruptcy is much closer now. Judge Kevin Carey will look at the votes and decided which plan to approve. The hearings for this decision begin on March 7th and could run for a few days. Under each of the plans, Tribune Company would exit bankruptcy intact. However, the two plans vary greatly on how ownership will be divided between creditors and how the inevitable lawsuits regarding the Sam Zell-led leveraged buyout in 2007 will be dealt with. Both sides are preparing for what could become a nasty court battle in early March.
Tribune Company issued a
press release on Friday, focusing on the positive votes for their side. Don Liebentritt, Tribune's current Co-President and Chief Restructuring Officer, said in the statement: "These results are as we expected and we are pleased that they confirm broad support for the restructuring plan supported by the company and its co-proponents." Aurelius Capital Management did not issue any statements.
When the process of choosing a plan first began, in October 2010, there were
four competing plans proposing how Tribune Company assets and ownership should be divided up upon exiting bankruptcy. One plan
dropped out in mid-December, while another
dropped out at the start of this month. Both dropped plans were able to cut deals with Tribune Company, as long as they dropped their reorganization plans and publicly threw their support behind the TribCo proposed plan. Aurelius Capital, which has a reputation for being extremely difficult to negotiate with in bankruptcy cases, did not accept any Tribune-backed plans and will continue to fight rigorously for as much money as they can.
The Chicago-based Tribune Company is the country's biggest media corporation in bankruptcy. It filed for bankruptcy in December 2008, with approximately $13 billion in debt, less than one year after real estate developer Sam Zell completed a more than $8 billion leveraged buyout of the media giant. According to court records, TribCo is valued at about $6.75 billion.
Tribune Company owns twenty-three television stations, thirteen newspapers, various magazines, one radio station and many other websites and companies. Locally, among the company's properties owned include the Chicago Tribune, RedEye, Hoy, Chicago Magazine, Naperville Magazine, WGN-AM, WGN-TV, CLTV, and WGN America.
