The clock is ticking on The Tribune Company’s deadline to come up with a reorg plan and the company is once again asking the bankruptcy court for a little more time. Meanwhile, creditors are continuing to give the Chicago company a tough time, and have filed court papers requesting the right to sue the parties involved with the company’s $8.2 billion leveraged buyout, Reuters reported.
The buyout was engineered by Chicago real estate magnate Sam Zell, who became chairman and CEO upon completion of deal in Dec. 2007. But two years and $13 billion in debt later, Zell gave up the CEO post to COO Randy Michaels.
At the same time Zell, who remains chairman, handed the CEO reins to Michaels, the bankruptcy court rejected a challenge from lenders that the company’s management be stripped of their control. The court gave Tribune’s management the extension it sought, ordering a deadline of Feb. 28 for the company to submit its restructuring plan. It says it expects to file before that date, but wants to be certain it will maintain control through that time.
Separately, the lenders didn’t specifically identify the entities it wants held responsible for initiating the buyout. The court will hear the two requests on Feb. 18.