Tribune's Cash Grows to $1.5 Billion on April Profit

Bloomberg News

Newspaper publisher Tribune Co. filed an operating report yesterday for a month ended April 25 showing net income of $26.9 million on revenue of $232 million. Operating income for the month was $25.6 million. Reorganization items were $7.9 million.

Cash grew by $34 million in the period, ending with a $1.5 billion cash balance on April 25.

Tribune also filed another revision to the disclosure statement explaining the proposed Chapter 11 plan. The hearing for approval of the disclosure statement resumes May 28.

The new version of the disclosure statement tells creditors the company plans to implement a bonus program for more than 30 executives that could pay about $15 million total.

Last year, the bankruptcy judge in Delaware declined to approve bonuses while suggesting that Tribune include the program in the reorganization plan.

At a hearing last week, the bankruptcy judge told the company to modify the disclosure statement by adding details about the business and exit financing. The disclosure materials must also include statements by creditor groups supporting and opposing the plan and the settlement it includes.

With the report of the examiner due July 12, creditors will have an opportunity to take the examiner's opinion into consideration before voting for the plan is completed on July 30.

The examiner is analyzing the strength of creditors' claims that the $13.8 billion leveraged buyout led by Sam Zell in December 2007 included fraudulent transfers.

Tribune filed a proposed Chapter 11 plan in April to implement a settlement of the LBO claims negotiated with some creditors. Holders of $3.6 billion in pre-bankruptcy secured debt immediately came out opposing the plan and the settlement.

Tribune is the second-largest newspaper publisher in the U.S. It listed $13 billion in debt for borrowed money and assets of $7.6 billion in the Chapter 11 reorganization begun in December 2008. It owns the Chicago Tribune, Los Angeles Times, six other newspapers and 23 television stations.

The case is In re Tribune Co., 08-13141, U.S. Bankruptcy Court, District of Delaware (Wilmington).

Tribune Chapter 11 Plan Includes $15M In Executive Bonuses

The Wall Street Journal: Tribune Co. has unveiled plans for a third round of top executive bonuses, nearly $15 million, bringing to more than $72 million the amount of pay enhancements the media company handed out while operating under bankruptcy protection.

Publisher of the Chicago Tribune, Los Angeles Times and Baltimore Sun and operator of a chain of broadcast stations, Tribune wrapped the latest bonus programs into the Chapter 11 plan it will be sending out for creditor votes.

Creditors will be voting on the bonuses as they decide whether to support Tribune’s plan, which dishes out equity to cover part of its $12.7 billion debt load.

The new bonuses, which cover 42 top executives, include nine of Tribune’s 10 top-ranking corporate leaders, according to papers filed with the U.S. Bankruptcy Court in Wilmington, Del.

They are in addition to $57.4 million worth of bonuses already approved by a bankruptcy judge over the protests of unions whose members lost jobs due to the company’s financial struggles. The earlier bonuses were paid out between May 2009 and February 2010.

Hundreds of managers were included in the court-approved bonus programs, along with top executives. Tribune has refused to identify top leaders who participated or say how much they received, other than to say Chairman Sam Zell didn’t participate.

The Chicago company also hasn’t revealed the identities of insiders who collected $268 million in pay, bonuses and severance pay the year before the company filed bankruptcy.

Tribune filed for Chapter 11 protection in December 2008 after a leveraged buyout piled $8 billion worth of debt on the media enterprise.

It hopes to be out of bankruptcy by September as the property largely of banks that financed the deal. If Tribune’s Chapter 11 plan is approved, the company will have shaken off billions in debt and silenced questions about the wisdom of the LBO transaction.

Yet to be revealed is the percentage of equity in the reorganized company that will be set aside for management under Tribune’s Chapter 11 plan. Like most companies departing bankruptcy, Tribune has said it plans to reward management with stakes in the reorganized media company.

How much equity executives will get, Tribune hasn’t said. The company’s financial advisers estimate the post-Chapter 11 company will have an equity value of $4.1 billion.

A spokesman and an attorney for Tribune didn’t respond Tuesday to requests for information about the equity incentive plan. The company has promised to supplement information on its Chapter 11 plan before a July 30 voting deadline on the plan.

(This report is from Dow Jones Daily Bankruptcy Review, which covers news about distressed companies and those under bankruptcy protection.)