A federal bankruptcy judge has given Tribune Company the green light to solicit support from creditors for its plan to emerge from Chapter 11. The proposal had been tied up by various objections, but will now move forward.
As proposed by Tribune management, the company’s senior lenders would hold a 91% stake in the TV/newspaper/radio/Internet company after emerging from the financial reorganization. Holders of unsecured bonds would get 7.4%.
Votes by creditors on whether to back the plan are due by July 30th. Judge Kevin Carey wants the voting results delivered to him by August 6th. He has set a hearing for August 16th on confirmation of the plan, although that hearing may be continued to other dates to deal with what are sure to be complex issues.
Following the judge’s ruling on Monday, Tribune Company CEO Randy Michaels and COO Gerry Spector sent this email advisory to employees:
“We want to give you a brief update on the latest developments in our Chapter 11 process. We’ve been working with our various creditor constituencies to resolve their objections to our disclosure statement, which is designed to explain the details of our plan of restructuring. Today the U.S. Bankruptcy Court for the District of Delaware approved the amended disclosure statement and related voting materials. We are pleased that we’ve reached this milestone and can now begin soliciting support for the plan.
In the next week or so, the disclosure statement and other plan-related notices will be printed and mailed to creditors. Where creditors have claims against Tribune or one of its affiliates, and those claims are in a class of claims under the Plan entitled to vote on the Plan, they will also receive voting materials with the Disclosure Statement. Some employees may receive a copy of these materials. In addition, the confirmation hearing on our plan is scheduled for the week of August 16th, and all employees will be receiving a written notice of the hearing.
As a reminder, we have posted information about the plan of restructuring on the Tribune Company web site at www.tribune.com, which we will update periodically.
We’ll let you know about other developments in the Chapter 11 process as the summer progresses.
Randy and Gerry”