Tribune reorganization plan under immediate attack


The question isn’t who objects to the plan Tribune has hatched to emerge from Chapter 11 protection – the question is who doesn’t. Senior creditors, junior creditors and the Labor Department have all filed objections with the court.

A common thread among objections is said to be insufficient provision of information on how the plan was put together and on charges that the transaction was fraudulent in the first place.

Some senior creditors are saying that junior creditors have an overly generous compensation package. Meanwhile, junior creditors want more information on the possibility of a “fraudulent conveyance” finding, meaning that the emerging company was created with so much debt that it was overburdened from the outset.

According to the Chicago Tribune, the Department of Labor wants more information about creditor risk associated with the possibility that the merger violated the Employee Retirement Income Security Act of 1974.

Tribune still expects the plan to be approved. In a statement, the company wrote, “The plan of reorganization we have filed with the bankruptcy court is fair to our creditors and in the best interests of all parties involved with our Chapter 11 process,” the company said. “We remain confident in our ability to get the plan approved by our creditors and confirmed by the bankruptcy court.”