Friday, November 12, 2010

Tribune Creditors Seek Millions From Insiders

(Reuters) - Tribune Co creditors asked a Delaware judge to let them try to recover millions of dollars awarded to insiders in the year prior to the media company's bankruptcy, saying they can do a better job than Tribune can.

In a Thursday court filing, Tribune's official committee of unsecured creditors said it wants current and former Tribune officers and directors to return more than $250 million of awards, including bonuses and restricted stock.

The move escalates the battle over the future of Tribune, whose properties include the Chicago Tribune, the Los Angeles Times, WPIX, KTLA, and the WGN television superstation.

The committee also sought permission to pursue claims against Tribune's past owners or possible future owners. Among these are current owner Sam Zell and JPMorgan Chase & Co (JPM.N), one of his lenders.

"There are inherent conflicts that make it very difficult, if not impossible, for a company to vigorously pursue actions" against insiders and owners, J. Landon Ellis, a lawyer for the committee, wrote in the filing with the U.S. bankruptcy court in Wilmington, Delaware.

U.S. bankruptcy law allows a court to reverse some awards granted to insiders in the year leading up to a bankruptcy. Sums recovered go to creditors.

Gary Weitman, a Tribune spokesman, did not immediately return a call on Friday seeking comment.

Tribune sought Chapter 11 protection on December 8, 2008, a year after Zell -- the billionaire real estate developer -- led an $8.2 billion buyout.

The Chicago-based company has filed a reorganization plan, which has support from JPMorgan and hedge funds Angelo Gordon & Co and Oaktree Capital Management.

Three creditor groups have filed competing plans. These differ mainly in how various legal claims might be pursued.

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

(Reporting by Jonathan Stempel in New York; Editing by Phil Berlowitz)

No comments: