Tribune creditors to vote on 4 reorganization plans

By Michael Oneal
Posted Dec. 6, 2010 at 5:58 p.m.

The judge in Tribune Co.’s contentious bankruptcy case signaled his approval Monday to send four competing restructuring plans out for vote by the Chicago-based media company’s creditors.

If he issues the formal order by Wednesday, which will mark the two-year anniversary of the case, solicitation packages containing disclosure documents explaining the four plans will likely be mailed on Dec. 22, said a Tribune Co. lawyer.

Creditors will then have until Jan. 28 to cast their votes and the judge will use those results to gauge support for the various plans ahead of a five-day confirmation hearing set for early March.

In approving the disclosure documents, U.S. Bankruptcy Judge Kevin Carey sent a rebuke to junior bondholder Aurelius Capital Management for failing to heed his request at a hearing last week to tone down the rhetoric in its plan advocacy statement. “This is a process I will not let get out of control,” Carey said, noting creditors’ comments that the fractious proceeding was devolving into a “four-ring circus.”

Carey also signaled, however, that he will likely lend some support to Aurelius in its request for more discovery in the case ahead of the confirmation hearings. That would be a victory for the litigious hedge fund as it seeks to extract more evidence to disrupt a settlement proposed by Tribune Co. , the unsecured creditors’ committee in the case and several of the company’s biggest senior creditors, including Oaktree Capital Management, Angelo, Gordon & Co. and JPMorgan Chase.

That alliance had asked the court to approve a hard stop to more discovery, arguing that a court-ordered 1,100-page report examining the company’s failed 2007 leveraged buyout provided ample evidence for the opposing parties to use in arguing their respective cases.

Tribune Co. owns the Chicago Tribune, Los Angeles Times and other media properties.


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