Investors in Tribune Sue Banks

Investors in Tribune Sue Banks - Image via Wikipedia

Investors in the bankrupt and deeply troubled Tribune Company have sued the banks that arranged for billions in financing for the media outlet. 

According to the documents, the banks arranged for the financing knowing that the company would never be able to repay the massive debt. 

This is the latest in the ongoing drama that has surrounded the Tribune Company since they fell into bankruptcy. They have tried and failed on several occasions to emerge from bankruptcy with financial plans. Recently they were able to file a plan that was approved by some investors. 

However, the long trip is not over for the company. The bankruptcy judge ordered that the investors could also sue the top-level executives in the Tribune Company for taking out loans that their company could not repay. This has changed the face of the entire filing process. 

Furthermore, the Tribune Company must still face their junior creditors when the bankruptcy is completed. The current plan for financial solvency extends only to the senior level creditors. This has angered many of the lower levels of creditors that are owed millions in overdue loans. 

If the final bankruptcy plan is approved by a Delaware judge then the company should emerge without debt. Yet, they will still need to continue with payments to their creditors over the course of three years. The first payment is scheduled for early next year totaling more than $100 million. 

JPMorgan announced today that they would sue all banks that allowed for continued financing for the troubled media outlet.