CHICAGO: Tribune received a 10-week extension on its reorganization this week from the federal court handling its bankruptcy. Judge Kevin Carey gave the media conglomerate until the end of February to submit its plan. The judge also left open the possibility of another extension pending a hearing in mid-February. This makes Tribune’s third extension of its exclusivity to come up with a reorg plan. The company filed for Chapter 11 bankruptcy a year ago with $13 billion in debt and $400 million in cash.
Tribune’s bankruptcy team said it needed more time to review elements of the reorganization plan, to the chagrin of a group of senior creditors who asked the court to reject the extension. The Credit Agreement Lenders group petitioned the court to be allowed to propose its own reorg plan--one that favored senior over junior lenders, the Los Angeles Times said. The CAL group owns $4.4 billion of the $8.2 billion debt incurred by Tribune Chairman Sam Zell to take the company private two years ago. Zell orchestrated a tax-exempt, employee-buyout with the loans, investing only $315 million himself. An investigation of the buyout continues.
In a separate announcement, Tribune elevated Randy Michaels to CEO and elected him to the board. Michaels was serving as chief operating officer. Sam Zell, who was serving as CEO, will remain on the board.
Tribune owns the Los Angeles Times, the Chicago Tribune and several other newspapers, as well as 23 TV stations, the WGN cable network and the Chicago Cubs.
More on Tribune:
August 12, 2009: “Tribune Employee Union Wins Access to Exec Bonus Docs”
April 13, 2009: “Tribune Gets Loans Modified and Itself Subpoenaed”
March 30, 2009: “Tribune Merges TV and Newspaper Operations”
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