The dispute among The Tribune Company and its various lenders over its plan to emerge from bankruptcy has reached an impasse and the newspaper publisher will have to come up with a new proposal. According to reports of the latest court proceeding in Reuters and the AP, Tribune will submit a new reorg plan by Aug. 27. At the same time, its warring creditors are expected to raise their own proposals for bringing the company out of Chapter 11, suggesting that this saga could drag out beyond the two-year anniversary of Tribune’s bankruptcy filing this coming December.
The bankruptcy was filed less than a year after Chicago real estate magnate Sam Zell took control of the company, which publishes the LA Times and Chicago Tribune, in an $8.2 billion leveraged buyout.
Last spring, it looked as if Tribune might conclude its bankruptcy ordeal. But another rupture with its lenders occurred in April, when Tribune settled with some of its bondholders. When that happened, bank lenders, led by Oaktree Capital Management, charged that the bondholders