Tribune bankruptcy judge to write opinion on restructuring plan
WILMINGTON, Del. — The judge in Tribune Co.’s bankruptcy case said he planned to write a formal opinion on the company’s restructuring plan and hoped to have something ready by early July.
At that time, U.S. Bankruptcy Judge Kevin Carey suggested at a confirmation hearing Friday, he will either approve the plan or provide Tribune and its creditors with a road map for how to fix it so that it can be confirmed.
After 31/2 years in Bankruptcy Court, Tribune officials were hoping that the judge would give a more definitive signal that he planned to approve the plan.
But most observers still believe that Carey ultimately will approve it, allowing Tribune to exit bankruptcy by the end of this year. The Chicago company owns the Los Angeles Times, KTLA-TV Channel 5, the Chicago Tribune and other media properties.
For the moment, the case has come down to five relatively small issues that still have to be resolved, mostly language surrounding the payment of lawyer fees and technical issues related to a litigation trust that is part of the plan.
The trust is a vital issue for junior creditors because it preserves legal claims against an array of different parties related to Chicago billionaire Sam Zell’s 2007 leveraged buyout of Tribune, which the creditors said left the company insolvent.
The official record will be closed on all open issues during a telephonic hearing Monday, and Carey will be given final papers later in the week.
Carey’s decision to write an opinion instead of delivering one from the bench was not unexpected given how contentious the case has been. But it will delay confirmation for at least several weeks.
Don Liebentritt, Tribune’s chief restructuring officer, said he was hopeful the delay wouldn’t stall Tribune’s application with the Federal Communications Commission to transfer its broadcast licenses to a new ownership group led by senior creditors Oaktree Capital Management, Angelo Gordon and Co. and JPMorgan Chase & Co.
The FCC can’t rule on the transfers until it has a confirmation order, but the company has been working with the agency’s staff to answer questions and move the process along.
Liebentritt said the FCC approval is a “wild card” in the effort to exit bankruptcy smoothly. He said the uncertainty stems from whether anti-big-media organizations that have opposed Tribune licensing applications in the past will emerge this time.
The hearing Friday centered on adjusting legal language in the plan to preserve the rights of junior creditors to sue former Tribune shareholders, officers and directors over the botched Zell buyout.
It also took up the technical issues of how some of the hundreds of lawyers in the case would get paid.
