US Bankruptcy Judge Kevin Carey on Wednesday (9/1) appointed a mediator who will assist in Tribune Company’s negotiations with various creditor constituencies as the company’s Chapter 11 process moves forward. The mediator is, like Carey, a federal bankruptcy judge in Delaware, Kevin Gross.
Gross is known to RBR-TVBR readers as the judge for the Regent Communications bankruptcy case.
“We’re pleased that the court has appointed a mediator — this is a clear sign that reaching consensus is a valuable part of this process,” said Tribune CEO Randy Michaels. “We welcome Judge Gross’ participation in the process and we look forward to his wisdom and guidance as we move forward,” Michaels added.
In addition, Tribune’s Board of Directors has named a special committee to oversee the company’s Chapter 11 process. The committee is composed of four independent directors: Mark Shapiro, as Chairman; Jeffrey Berg; Maggie Wilderotter; and Frank Wood.
The order by Judge Carey calls for the mediator to conduct non-binding mediation concerning Tribune’s reorganization plan with the various parties. Included are Tribune Company’s current management/board, the Official Committee of Unsecured Creditors, JP Morgan Chase Bank as agent for the senior lenders, Angelo Gordon & Co., the “Credit Agreement Lenders,” the “Step One Credit Agreement Lenders,” Wells Fargo Bank as agent for the bridge loan lenders, Law Debenture Trust Co. of New York as successor trustee under the senior notes indenture, Deutsche Bank as successor trustee under certain senior note indentures, Centerbridge Credit Advisors LLC, Aurelius Capital Management LP, EGI-TRB LLC (Sam Zell’s personal investment company) and Wilmington Trust Co. as successor trustee under the PHONES notes indenture. Regarding the Credit Agreement Lenders, Oaktree Capital Management LP must have a representative present who is authorized to make a decision binding on Oaktree, but not on the other Credit Agreement Lenders.
Judge Gross will make the rules for the mediation process and the parties may not submit documents to him until requested to do so. He is charged with trying to resolve the LBO-related litigation as well, so Judge Carey has barred any new legal actions in that regard unless permission is first sought from the court for a filing.
Meanwhile, The Wrap reports that the creditors could announce as soon as next week that former Disney CEO Michael Eisner (who ran the company 1984-2005) is their choice to replace Michaels as CEO of Tribune Company post-Chapter 11. The Los Angeles Times, which is owned by Tribune Co., had first reported rumors of the creditors’ recruitment of Eisner on August 26th.
RBR-TVBR observation: You’ve got to be kidding! Eisner was finally pushed out of Disney after a long battle against his own discontented shareholders. Just why would anyone see him as a visionary to take an old media company into the digital age? His big claim to “fame” in that regard at Disney was go.com, the web portal that went nowhere and was finally shut down in January 2001 as Disney wrote off $820 million for the failed venture.