Tribune reaches a deal with 2 large creditors
After a two-day, courtappointed mediation in its bankruptcy case, Tribune Co. and two of its biggest creditors reached a proposed settlement Tuesday over how to reorganize the Chicago-based media company.
But the pact, struck with hedge funds Angelo, Gordon & Co. and Oaktree Capital Management, failed to win the support of a number of other key constituents in the case, meaning the mediation process has yet to forge a solution to a nearly 2year-old Bankruptcy Court battle.
U.S. Bankruptcy Judge Kevin Gross, the court-appointed mediator, acknowledged in a court filing Tuesday that the mediation was incomplete but said he did not consider it closed.
Tribune Chief Restructuring Officer Don Liebentritt also sounded a note of optimism. “We remain confident that additional settlements will be reached.”
Significant disagreements remain, however, between the new Tribune alliance and a variety of holdouts, including senior lender JPMorgan Chase, the Official Committee of Unsecured Creditors and junior note holder Aurelius Capital Management.
Attorney Howard Kaplan, who represents 14 senior creditors holding $730 million worth of bank debt, called the new plan unfair, as did the creditors committee.
The new plan is designed to allow Tribune operating businesses, including the Los Angeles Times, KTLATV Channel 5 and the Chicago Tribune, to exit bankruptcy in relatively short order without first having to resolve legal claims generated by the company’s ill-fated 2007 leveraged buyout.
Those claims would be put into what’s known as a litigation trust to be fought over in court by junior creditors while the company emerges free and clear, owned by the banks and hedge funds that control its senior debt — including Oaktree, Angelo Gordon and JPMorgan.