Judge OKs Tribune Co. Bankruptcy Exit Plan
By Chuck Sudo in News on Jul 14, 2012 7:00PM
There's light at the end of the tunnel for Tribune Co.'s long bankruptcy journey. U.S. Bankruptcy Judge Kevin Carey, who's been presiding over the nearly four-year contentious bankruptcy, approved a plan Friday that would transfer ownership of the media company to New York and Los Angeles-based hedge funds and banks.
Carey overruled a litany of objections to the plan by creditors in a Delaware Court, paving the way for Tribune Co. to be purchased by an investment group led by JPMorgan Chase & C0.; hedge fund group Oaktree Capital Management; and Angelo, Gordon & Co., a capital firm that invests in struggling companies.
That doesn't mean Tribune Co. is in the clear yet, only that there's an event horizon to be seen. The creditors have promised to appeal once Carey makes a formal opinion on the restructuring plan. The new ownership—which would mark the first out-of-Chicago ownership group in Tribune's history—would also set off another round of anxiety for a company that filed for Chapter 11 bankruptcy protection in 2008, one year after billionaire developer Sam Zell's $8 billion purchase of Tribune Co., which was heavily leveraged, left it $13 billion in debt and ushered in one of the most colorful nadirs in the company's history. (Zell, in a delicious irony, is also listed as a creditor in the Tribune bankruptcy.)
Tribune Co. is one of the largest media companies in the country, owning newspapers such as the Chicago Tribune and Los Angeles Times, and television stations WGN in Chicago; WDCW in Washington, DC; KTLA in Los Angeles; and WPIX in New York City. According to court filings, valuation of the companies publishing concerns is estimated at $623 million while their broadcast properties have an estimated valuation of $2.85 billion.