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Published on Thursday, 08 April 2010 16:54
The Tribune Company announced today that it has reached an agreement with its creditors that will allow it to reach its goal of exiting bankruptcy protection later this year. Tribune major creditors J.P. Morgan and Angelo Gordon, lenders under the company's prepetition senior credit facility, and Centerbridge Partners, holder of approximately 37% of the company's outstanding prepetition senior notes, have agreed to a settlement of all potential claims arising from the company's going-private transactions in 2007 and Chapter 11 bankruptcy of 2008. The agreement also has the support of the Official Committee of Unsecured Creditors.
The terms of this agreement will be made part of the plan of reorganization for Tribune and its debtor affiliates, to be filed with the U.S. Bankruptcy Court for the District of Delaware.
According to the agreement, the holders of the senior notes would receive 7.4 percent of the company's distributable value, which would be paid in a combination of cash, debt and stock. The company's senior credit facility lenders would receive cash and debt, and stock representing in excess of 91 percent of the equity of the reorganized company. With this plan, the Tribune Company would emerge from bankruptcy, with decreased financial leverage, but with its business units intact and with adequate capital & liquidity for normal operation. Once the plan is filed, it will be subject to a creditor vote and approval by the Court.
Locally, the Tribune Company owns WGN-AM, WGN-TV, the Chicago Tribune, RedEye and Hoy. It also owns cable/satellite superstation WGN America, newspapers in seven other markets, and twenty-three other television stations nationwide.
