Now in Chapter 11 for well over three years, Tribune may finally be heading out of bankruptcy–pending approvals (including FCC). U.S. Bankruptcy Judge Kevin Carey on 7/13 pledged to confirm the latest restructuring plan. It will be controlled for the first time in its 165-year history by senior creditors led by Oaktree Capital Management; Angelo, Gordon & Co.; and JPMorgan Chase & Co.
In a memorandum overruling objections by junior creditors and others, Carey said the plan’s proponents will have to make revisions to reflect recent court rulings before he can actually confirm it.
Sources told The Chicago Tribune that will require the company to edit the plan and craft a new confirmation order that will then be passed around for sign-off by all parties involved. Tribune CEO Eddy Hartenstein said the company expects the judge to issue his formal approval confirming the plan “within days.”
Junior creditors opposed to the plan pledged to appeal Carey’s decision. Related legal battles from the company’s disastrous 2007 leveraged buyout are likely to go on for years. Tribune found itself in bankruptcy court less than a year after a bid to take the company private led by Chicago billionaire Sam Zell left it with $13 billion in debt just as the economy and ad sales began to tank.
But few experts expect the appeals to gain traction and Carey’s confirmation will allow Tribune lawyers to clear FCC approvals to transfer its TV and radio licenses to Oaktree and the others. Tribune will also be reshaping its corporate structure and nailing down $1.1 billion in new debt financing and a $300 million line of credit. It’s expected that Tribune will emerge from the Chapter 11 process sometime this year.
Tribune includes its newspaper group–the Chicago Tribune, the LA Times and six other dailies; 23 television stations, WGN-AM and investments in entities such as the TV Food Network andCareerBuilder.com.
The story noted that experts predict Oaktree and its partners will soon look to break up Tribune and sell its papers, perhaps to local buyers.