Tribune sees Chapter 11 exit via new deal with Oaktree


Oaktree Capital Management L.P. and Angelo, Gordon & Co. L.P. have entered into an agreement with Tribune Company that “will settle claims surrounding ‘Step 1’ of the company’s 2007 going-private transaction.” Tribune says that it opens a pathway out of Chapter 11.

“The plan addresses two primary issues that are fundamental to a successful reorganization of Tribune,” said Don Liebentritt, Tribune’s Chief Restructuring Officer. “First, it enables the company to exit Chapter 11 and distributes the equity of the reorganized Tribune and its subsidiaries to the holders of the Initial and Incremental Term Loan claims. Second, to the extent not settled prior to confirmation, all claims identified by the Examiner’s Report relating to ‘Step 2’ of the company’s going-private transaction are preserved and placed in a litigation trust. We remain confident that additional settlements will be reached.”

The settlement, which was overseen by a court-appointed mediator, gives senior bondholders $300M cash, amounting to 23% of their claim, in addition to their interest in the litigation trust.

Describing other facets of the agreement, Tribune said in a statement, “Unsecured creditors of Tribune Company will receive the same percentage recovery, also in cash and an interest in Litigation Trust, which will allow them to seek redress for potential fraudulent conveyance issues. Unsecured creditors of Tribune Company’s subsidiaries will have an opportunity to receive 50% of their claim amount in cash. The plan also provides for both Initial Term Loan Lenders and Incremental Term Loan Lenders to receive a pro rata distribution of cash, debt and equity of the reorganized Tribune and its subsidiaries pursuant to the terms of Credit Agreement.”

The attached PDF charts details of the settlement, as filed with the bankruptcy court.