Judge affirms Tribune’s exclusive right to pursue bankruptcy plan

Fresh from striking a hard-won compromise with many of its key creditor constituencies, Chicago-based Tribune Co. took one step forward and another step back at a hearing in U.S. Bankruptcy Court on Tuesday.

Presiding over a courtroom packed with almost 100 lawyers and associates, Judge Kevin Carey blessed Tribune’s exclusive right to press ahead with its recently filed settlement plan, rejecting a request to file a competing plan from several disgruntled creditors led by bond investor Oaktree Capital Management.

At the same time, however, the judge signaled he was in favor of appointing an independent examiner in the case to study and pass judgment on evidence that Tribune’s 2007 leveraged buyout may have been improper, a move that could nudge the company and certain of its creditors back to the negotiating table.

Tribune is the parent company of the Los Angeles Times, the Chicago Tribune, KTLA-TV Channel 5 and other media properties.

The judge’s aim, attorneys on all sides of the case said, was to press Tribune and its creditors to work even harder to come up with a settlement that would include as many parties as possible and avoid messy litigation. He also may be seeking legal support to help him sort out the thicket of issues in the event a settlement is ultimately contested.

“The judge just wants to make sure nobody has a possible basis to object to a plan at confirmation,” said Howard Seife of Chadbourne & Parke, lead attorney for the committee of unsecured creditors in the case.

mdoneal@tribune.com