Tribune Co. Committee To Oversee Reorganization

By Michael Oneal
Chicago Breaking News

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 Co. board members and officers may be the target of buyout-related claims.

In a court filing, the company said four directors will sit on the committee, all of whom joined the board when the 2007 transaction closed or after. They are: Mark Shapiro, former chief executive of Six Flags Inc.; Maggie Wilderotter, chief executive of Frontier Communications Corp.; Jeffrey Berg, chairman of International Creative Management Inc.; and Frank Wood, chief executive of Secret Communications and formerly chief executive of Jacor Communications, once owned by Tribune Co. Chairman Sam Zell.

According to an article by Tom Hals, the committee's formation was disclosed in a court request to employ the Jones Day law firm to advise the committee. Tribune Co is being advised by Sidley Austin. The bankruptcy had been directed by lenders and a group of senior bondholders. However, the agreement between those two groups crumbled following an independent examiner's report that found billions of dollars of lenders' claims could be disqualified.

The case is In Re Tribune Co, U.S. Bankruptcy Court, District of Delaware, No. 08-13141.

Mark Fitzgerald, form Editor and Publisher wrote; "Tribune said the decision to form the special committee followed the report by court-appointed examiner Kenneth Klee, who concluded that a court was likely to find that aspects of the deal engineered by real estate magnate Sam Zell were or bordered on fraudulent conveyance, meaning the deal, which larded $8.2 billion of debt on a company that already carried about $5 billion of debt, made Tribune insolvent from day one."