The two dueling creditor groups haven’t been able to resolve their differences, so US Bankruptcy Judge Kevin Carey on Tuesday (6/28) heard arguments from both sides on why their Chapter 11 reorganization plan for Tribune Company should prevail. A decision could be a month or so away.
According to the company’s flagship Chicago Tribune, which has an intense interest in the subject, Judge Carey once again urged the two groups to keep working at reaching a mutually agreeable resolution. But he also acknowledged that “sometimes you need a decision from a judge.”
We know how Judge Carey will be spending his summer. He promised to spend most of his time over the next month trying to come up with a decision on the Tribune Co. reorganization.
There is no disagreement over who would own the majority of Tribune Company when it emerges from Chapter 11. That is the senior creditors, led by JPMorgan Chase, Angelo Gordon & Co. and Oaktree Capital. They are backing a reorganization plan which is also supported by Tribune management.
The alternative plan, backed by Aurelius Capital Management and other junior creditors, would still put the senior creditors in charge but give a better deal to – you guessed it – the junior creditors.