Tribune tribulations as bottom drops out on reorg plan


Two key creditors have withdrawn support for a Tribune Company reorganization plan, throwing the future of the company into doubt and possibly pointing the dispute towards the courts. The question is how many lawsuits may be simmering.

The original settlement plan from Tribune included key creditors JPMorgan and Angelo, Gordon & Co. They are no longer with the program.

The next steps – Tribune will submit a plan; other parties are now free to and may well submit alternative plans. Lawsuits from any and all directions are well within the realm of possibilities. That includes Tribune, according to a report in its own Chicago Tribune, which says it may try us the threat of court action in its own right to force a settlement. Tribune could use “a pretty good sense of who is being unreasonable” as the basis of any such action.

According to the New York Times, Tribune CEO Randy Michaels observed, “This process is moving more slowly and has become noisier than we had hoped.”

It is expected that the latest delay will push a final decision on the troubled company to November at the earliest.

Tribune remains saddled with creditors who think the acquisition of the company led by Sam Zell was fraudulent from the outset due to the assumption of impossible debt levels.

RBR-TVBR observation: We can understand why a real estate guy like Sam Zell may have been looking to diversify back in the middle of the first decade of the 21st Century. The fact that he landed in a business that was even more compromised than real estate – newspapers — is nothing less than astonishing.

Zell and the radio people he’s hired have been laboring mightily to fix the newspaper business model. The result is a mountain of debt and an intractable bankruptcy proceeding.

From the Zell perspective, it would seem there is only one word that can apply to this situation, and still be printable in a family publication such as RBR-TVBR.

And that word is “YIKES!”

But Tribune may yet wriggle out of this, even though it has given up almost all of its ownership of Wrigley Field. The reason is that the media properties Tribune owns are iconic in many cases – they’d probably be doing just fine if the debt was taken out of the equation. And investment companies don’t want to run a company like Trib, they just want to profit from it.

So what will happen? Take a break, but stay tuned.