Published on Wednesday, 25 August 2010 20:01
Will Chicago's Tribune Company soon be rid of Sam Zell & Randy Michaels? Numerous reports are out tonight saying that may very well be the case if the creditors get their way.
The last week has been a bad one for the current Tribune bosses, who have been unable to gain any ground in their quest to exit bankruptcy. All talks have broken down between Tribune representatives and both the major & minor creditors. Zell & Michaels, who thought they would have been out of bankruptcy by now, are now looking at the very best, many more months of battles, and the very worst, completely losing their company & jobs to creditors.
According to a wide amount of sources tonight, including the Tribune itself, the major creditors, who not too long ago were completely behind Zell & Michaels' reorganization plans, are now cold to the Tribune's plans and courting other executives to take over the operations of the company if/when the creditors take power. The largest creditors include JPMorgan Chase & Co., Angelo Gordon & Co., and Oaktree Capital Management.
Latest reports have the largest creditors asking former Walt Disney CEO Michael Eisner to become Chairman of Tribune Company, replacing Sam Zell. Jeff Shell, the President of Comcast's programming group and a former News Corp. executive, is under serious consideration to replace the ever-controversial Randy Michaels as Tribune CEO.
On Monday, Michael Eisner gave an interview to Variety Magazine where he admitted that he had been familiarizing himself with the Tribune Company's situation and even buying up some of their debt.
Michael Eisner happens to be close, personal, childhood friends with John Angelo, the co-founder of Angelo Gordon & Co., one of the large creditors looking to take over Tribune Company. In Eisner's forthcoming book, "Working Together: Why Great Partnerships Succeed," Eisner spends a whole chapter talking about his friendship with Gordon, who he describes as being closer to than anyone, ouside of his wife & children.
Both Eisner & Shell are Los Angeles area residents and could consider eventually moving operations out of Chicago and to California.
Before any executive changes can be made by the creditors, a reorganization plan must be be approved between all parties involved & by the US Bankruptcy Court and in place. The current Tribune regime, not wanting to be tossed out from their positions, may make these talks difficult. They have already attempted to force a plan that would give the top exiting executives -- especially Randy Michaels -- incredibly wealthy "golden parachutes,"
totaling potentially hundreds of millions. These "golden parachute" clauses will certainly become sticking points in upcoming negotiations.
According to the Chicago Tribune report on these new developments, many other top executives have also been courted to take over the company by creditors. Some of those names include: Mel Karmazin, CEO of Sirius XM Radio Inc., Robert Pittman, former COO of AOL Time Warner, Fred Reynolds, the former CFO of CBS Corp., and Terry Semel, the former Chairman and Co-CEO of Warner Bros.
Tribune Company filed for Chapter 11 bankruptcy protection in December 2008, soon after Sam Zell led a leveraged buyout of the company, which threw the deeply in-debt company into much deeper debt.
Tribune Company owns 23 television stations, 13 newspapers, various magazines, one radio station and many other websites and companies. Locally, among the company's properties include the Chicago Tribune, RedEye, Hoy, Chicago Magazine, WGN-AM, WGN-TV, CLTV, and WGN America.
For more details on this latest company development, be sure to check out reports in the Chicago Tribune website
, the Los Angeles Times website
, the LA Times website again
, PaidContent.org website
, and Fishbowl LA