Wednesday, November 25, 2009

Tribune lenders propose competing plan of reorganization

By Chelsea Emery

(Reuters) - Debtholders of bankrupt Tribune Co (TRBCQ.PK) have asked a judge to deny the media company's request for more time to present a plan of reorganization so the lenders themselves can offer a plan, according to court filings.

Tribune Cos, owner of the Chicago Tribune and Los Angeles Times newspapers, have asked U.S. Bankruptcy Judge Kevin Carey to extend the time in which it can exclusively file a so-called Chapter 11 plan. But the Credit Agreement Lenders group, whose members hold about $4.4 billion in debt, have objected.

The group's plan includes a reorganization of subsidiary debtors, or the entities that operate Tribune Co's various businesses, in which all known claims would be paid in full or unimpaired, with the exception of the claims held by the Credit Agreement Lenders members. Instead, the group would accept a combination of debt and equity, according to court documents.

"The motion should be denied so that the Credit Agreement Lenders themselves have the opportunity to proceed with a plan of reorganization that should win unanimous or near-unanimous acclaim and approval of the subsidiary debtor creditors," the group said in a Wilmington, Delaware, bankruptcy court filing dated November 24.

"We are reviewing the filing and will respond in due course," a Tribune Co spokeswoman said in an emailed statement.

The Credit Agreement Lenders include several Kohlberg Kravis Roberts & Co KKR.UL funds, a Goldman Sachs Group Inc fund and the Oregon Public Employees Retirement Fund.

A hearing on this and other matters is scheduled for December 1. Chicago-based Tribune Co, whose properties also include 23 local television stations, filed for Chapter 11 bankruptcy on December 8, hurt, in part, by a severe decline in advertising revenue and inability to make payments on about $13 billion in debt.

In 2007, the company had agreed to an $8.2 billion buyout led by real estate magnate Sam Zell.

The case is in Re: Tribune Company et al, U.S. Bankruptcy Court, District of Delaware, No. 08-13141.

(Reporting by Chelsea Emery, editing by Maureen Bavdek)

No comments: