Tribune Files To Exit Bankruptcy

expected, Tribune Company filed a plan of reorganization with the U.S.
Bankruptcy Court in Delaware on Monday (Apr. 12) that would “keep the
company intact, sharply reduce its debt and provide it with sufficient
liquidity to expand its business in the future,” according to a company

plan, which still must be approved by Tribune creditors and the court, should
allow Tribune to emerge from bankruptcy this year. The plan has to be approved
by both the court and the FCC, the latter because ownership of Tribune’s
23 TV stations will transfer to new owners, comprised of the company’s
major creditors. Those include J.P.Morgan Chase Bank, Angelo Gordon & Co.,
and others. 

expect Tribune’s restructuring plan to pass muster, although that
won’t come without some loud complaining from lenders who are still owed
money. On Monday, a group of 24 of Tribune’s lesser lenders filed its
objection with the court, calling the proposal “unwise and unfair.”
That group is collectively owned some $3.6 billion in outstanding loans.

Thursday (Apr. 8), Tribune announced that it had come to an agreement with
Centerbridge, the largest of these smaller lenders. That agreement paved the
way to filing this restructuring plan with the court.

Tuesday (Apr. 13), Tribune and its creditors’ attorneys will present the
restructuring plan to the court, and objectors will make their complaints
publicly known.

In fact,
the majority of Tribune’s lenders will not get most of their investment
back, at least in the short term. Tribune’s major creditors, who will
soon become its owners, will write off billions of dollars in return for equity
in the new company. The new Tribune will proceed with less debt to service and
“sufficient liquidity to effectively operate our businesses,”
according to a memo Tribune CEO Randy Michaels sent to employees on Monday.

As part
of the restructuring, Tribune expects to continue its recently implemented
employee retirement plan, including a 401(k) with a company match and
discretionary profit-sharing. Meanwhile, the company’s employee stock
ownership plan will end and the shares held by that plan would be extinguished.
Employees have been aware that change was coming since last fall, according to
Michaels’ memo.

plan better positions us to continue serving our users, readers, viewers,
listeners and advertisers across our  media platforms and gives us an
opportunity to expand our business upon emergence from a solid financial
base,” said Michaels in a statement.

Paige Albiniak

Contributing editor Paige Albiniak has been covering the business of television for more than 25 years. She is a longtime contributor to Next TV, Broadcasting + Cable and Multichannel News. She concurrently serves as editorial director for The Global Entertainment Marketing Academy of Arts & Sciences (G.E.M.A.). She has written for such publications as TVNewsCheck, The New York Post, Variety, CBS Watch and more. Albiniak was B+C’s Los Angeles bureau chief from September 2002 to 2004, and an associate editor covering Congress and lobbying for the magazine in Washington, D.C., from January 1997 - September 2002.