Last spring, it looked as if The Tribune Company was nearly done with its year-long bankruptcy ordeal. But as a WSJ report shows, the newspaper and TV station owner has had its hopes of concluding its reorg any time soon. The hold-up stems from Tribune’s settlement with with bondholders in April. When that agreement was reached, paving the way for what Tribune thought would be a clear exit out of Chapter 11 under the existing management, bank lenders, led by Oaktree Capital Management, complained that the bondholders’ deal would have them paying more than $400 million. Meanwhile, Chairman Sam Zell and his original backers wouldn’t have to reach into their pockets to pay a dime. Oaktree, which holds about 25 percent of Tribune’s debt, has mounted a legal challenge that could keep Tribune in bankruptcy court well past the summer.
As we noted back in February, 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