Tribune Co. forms panel to oversee bankruptcy reorganization
The board of directors of bankrupt Tribune Co. formed a special committee to oversee the media company’s contentious reorganization process and to manage any legal claims arising from its 2007 leveraged buyout.
Sources said the step is an effort to remove conflicts of interest from the debtor’s decision-making process since some Tribune board members and officers may be the target of buyout-related claims.
In a court filing Tuesday, the Chicago media company said four directors would sit on the committee. Each of them joined the board at the time of, or after, the transaction.
They are: Mark Shapiro, former chief executive of Six Flags Inc.; Maggie Wilderotter, CEO of Frontier Communications Corp.; Jeffrey Berg, chairman of International Creative Management Inc., and Frank Wood, CEO of Secret Communications and formerly chief of Jacor Communications Inc., once owned by Tribune Chairman Sam Zell.
The filing said the decision to form a special committee came in the wake of an independent examiner’s report, filed in late July, that scrutinized claims related to the $8.2-billion buyout that Zell led in 2007.
The report concluded that a court might find the buyout was improper in several respects and that, in turn, might spur legal claims against the lenders to the deal, the board, selling shareholders and Tribune officers.
In the wake of the examiners’ report, Tuesday’s filing said, a proposed settlement between Tribune and key creditors collapsed, and Tribune decided it was appropriate to form a special committee of independent directors to “oversee the plan process.”
Sources said the formation of the committee addresses the possible conflicts of interest faced by the wider board. In the filing, the company said the special committee sought to retain law firm Jones Day as counsel.
On Aug. 20, Tribune said it would file amendments to its reorganization plan to reflect continued negotiations toward a settlement.
But on Friday, the date it said it would file the changes, the company instead announced it would delay any filing pending the outcome of continued talks.
Tribune owns the Los Angeles Times, Chicago Tribune, KTLA-TV Channel 5 and other media properties.