Tribune judge extends hearings, unseals report

By Michael Oneal
Posted Aug. 3, 2010 at 1:36 p.m.

Tribune Co.’s attempts to exit bankruptcy court will be delayed at least until October, but could extend even beyond that as the company and its creditors dive into a new round of negotiations aimed at finally settling the 20-month-old Chapter 11 case.

The delay is an acknowledgment that an examiner’s report about the propriety of the company’s 2007 leveraged buyout has upset a previous settlement in the case and forced the company to redouble efforts to win the approval from a range of dissident creditors.

At a hearing in Delaware Tuesday, U.S. Bankruptcy Judge Kevin Carey granted Tribune Co.’s request to extend the confirmation hearings in the case from Aug. 30 to Oct. 4. He also extended the voting date on Tribune Co.’s restructuring plan from Aug. 6 to Aug. 20.

In a separate move, Carey unsealed the examiner’s report, making the entire 1,100-page document and its 20,000 pages of exhibits available to the public. The Chicago Tribune, which is owned by Tribune Co., had joined the examiner in requesting the unsealing despite confidentiality concerns of various parties mentioned in the report.

The four volumes of the report itself are currently available on the docket of the U.S. Bankruptcy Court in Delaware and the exhibits will be available on Tribune Co.-specific Web site management by Epiq Bankruptcy Solutions that can be accessed through

The report contains evidence backing up the examiner’s findings released last week that the second part of a 2007 transaction to take Tribune Co. private led by Chicago real estate magnate Sam Zell was a case of fraudulent conveyance, meaning that it rendered the company insolvent from Day One.

Those charges were raised by junior creditors and have become the focal point of Tribune Co.’s attempts to forge a settlement in the case.

Tribune Co.’s lead attorney, James Conlan of Sidley Austin in Chicago, said at the hearing in Delaware that he expects there will be amendments to a previously filed restructuring plan and that the plan could be ripped up altogether and replaced with a new plan, depending on the outcome of negotiations.

In the wake of the examiner’s report, Tribune Co. has contacted all relevant parties and initiated renewed talks, said Howard Seife of Chadbourne & Parke, lead attorney for the Official Committee of Unsecured Creditors in the case.

Conlan said that it would be optimistic to schedule confirmation hearings for October since it was unclear where the new negotiations would steer the case. If the company can get an early consensual settlement among its battling creditors, the case might move quickly from there. But if the settlement talks break down or they result in a “wholesale change” in the restructuring plan, Tribune Co. may have to ask for new hearings to approve a fresh “disclosure statement” outlining the changes.

For now, Carey scheduled confirmation hearings for Oct. 4 and Oct. 12-14. But, Conlan warned, resolution of the case may require dates “much later” than that, depending on how negotiations go.

“The nature of the amendments will in many cases drive the process,” he said.

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  1. jack (me) Aug. 3, 2010 at 7:35 pm

    I suppose that I can go to the Bankrupty Court site, but since the report is supposedly unsealed, at the behest of the Tribune, is someone in the news department going to have an article analyzing the allegations of fraud in a neutral manner? Or does the news department just take the company view that this only delays the proceedings?

  2. noname Aug. 3, 2010 at 8:20 pm

    WTF??? C’mon you thieving fraudulent idiots… “Tribune Co.-specific Web site management by Epiq Bankruptcy Solutions” Really?

  3. noname Aug. 3, 2010 at 8:22 pm

    Thank you, Michael Oneal, for covering this. Too bad the “breaking business news” gets deleted after so many negative comments.