Tribune Co. Hopes to Emerge From Bankruptcy

By Richard Gibson
Oct 23 2010

Massive media company Tribune Co. hopes that their newest plan, announced today, will be confirmed by a Delaware Bankruptcy court that will allow them to emerge from bankruptcy and continue with business reorganization.

However, creditors are planning to announce competing plans for increased creditor payments.

The Tribune Co. has been swimming in bankruptcy for the past two years. Next Friday stands as the deadline for filings in the case and the company is hopeful that they can finalize their case. A previous filing was declined by the court.

Under the current filing the company will agree to pay senior creditors no more than 50% of their current requested funds. Junior creditors are said to receive just 10% of the requested funds from the bankruptcy filing.

The Tribune Co. has been embroiled in a battle over the bankruptcy and employee problems for the past two years. Recently, CEO Randy Michaels resigned his position with the company. The resignation stemmed from the internal battle that has been raging since the company entered bankruptcy protection.

The Delaware Bankruptcy court ruled that creditors could sue Sam Zell, billionaire owner of the Tribune Co. as well as other top level executives in the company. Several of the creditors, including JP Morgan, have said that they plan to file lawsuits to recoup lost funding.

Under the plan filed by The Tribune Co. on Friday, the company would payout $120 million in the first round of settlement payments with later payments being made once the company becomes solvent.