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Friday, November 27, 2009

Tribune Co.'s No Good, Very Bad Week

By Drew Grant

Sam Zell is not going to be having the greatest Thanksgiving this year: not only has The New York Times enlisted some of his former Tribune Company employees to write the paper's new Chicago edition, but the newspaper publisher's request for an extension on its exclusive right to file a reorganization plan to lift the company from Chapter 11 is a being challenged by the company's creditors, Editor & Publisher reports.

It's been almost a year since Tribune filed for bankruptcy and it wants to maintain control over its reorganization plan, which it has yet to file to the court for approval.

Two weeks ago, top execs at Tribune asked for an extension for the filing of the plan until May, with the promise that the fourth quarters are traditionally the strongest at the company's papers. Now some of Tribune's lenders are seeking to block Tribune's extension request and asking to see more evidence for their allegations that the company's 2007 going-private deal was a fraudulent conveyance.
After Tribune asked the courts for six more months to restructure the company last week, JPMorgan Chase (one of Tribune's holders) urged an investigation into the publisher's practices, saying:

...it is time for the parties, who have been provided with more than enough information to permit them to decide how to proceed with regard to the transactions, to move forward without further delay. A four-month extension of debtors exclusive period to file a plan of reorganization will serve no purpose; an imminent termination of that period may spur movement.

Several other senior lenders are asking the courts to review the case and hand control of the process over to them, where those who have stake in the company could form a holding company over Tribune's assets and subsidiaries.




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