U.S. Bankruptcy Judge Kevin Carey extended the filing deadlines in Tribune Co.’s bankruptcy case Wednesday to give rival creditor groups more time to propose alternative restructuring plans for the Chicago-based media company.
The move will push the first disclosure hearing on those plans into late November and guarantees that the all-important confirmation hearings in the case won’t be held until sometime next year.
Carey had earlier given Tribune Co. and its various creditor constituencies until this Friday to file any restructuring plans. But junior creditors asked that a company-sponsored plan negotiated earlier this week be filed first and that they be given two extra weeks to decide whether to file competing plans.
The judge said Tribune Co. and its partners would have to file its plan by Oct. 22 and any other plans would be due by Oct. 29. The mandatory disclosure statement hearing to release the competing plans for vote would be held Nov. 29.
The Tribune Co. group includes senior creditors Oaktree Capital Management and Angelo, Gordon & Co.; banks represented by JPMorgan Chase, and the Official Committee of Unsecured Creditors, which represents the interests junior creditors.
That plan would give the junior bondholders $420 million, or about 33 cents on the dollar, and provide another $102 million to pay off retirees and general unsecured creditors. Senior creditors would end up owning the company.
But a number of other creditor constituencies, including Aurelius Capital Management, the largest junior bondholder, have signaled they will reject the proposal. Bloomberg reported that at least five creditor groups told Carey during a telephone conference Wednesday that they needed time to study Tribune’s bankruptcy-exit plan before they could decide whether to file their own.
Any of the plans will seek to settle claims brought by junior bondholders that Tribune Co.’s 2007 leveraged buyout, which was orchestrated by Chicago real estate magnate Sam Zell, left the company insolvent.
Tribune Co., which owns the Chicago Tribune, Los Angeles Times, WGN Ch. 9 and many other media properties, has been in bankruptcy since Dec. 8, 2008.