The embattled publisher of the Los Angeles Times, Chicago Tribune faces more legal hurdles on its way out of bankruptcy
Tribune Co. creditors will receive about a third of the money they are owed — plus a stake in a fund that will bankroll buyout lawsuits — according to its plan filed in U.S. Bankruptcy Court in Delaware.
Filed on deadline late Friday as expected, the bankruptcy plan gives creditors $420 million, or about 33 percent of what they originally had coming. The terms are more generous to bondholders than previous proposals.
The publisher of the Los Angeles Times and Chicago Tribune hopes that its latest plan will appease creditors and allow the company to emerge from bankruptcy, in a nearly-two-year-old case that’s been hampered by legal battles on both sides.
The Tribune’s creditors have until the end of the month to file their responses to Friday’s filing, which also requires approval of the court. The company had already detailed in court that it will cede control to senior loan-holders, including J.P. Morgan Chase, Angelo Gordon & Co. and Oaktree Capital Management LP.
If approved, the plan would be a major step toward ending a deeply troubling period for the 163-year-old company. Also on Friday, Randy Michaels, the company’s embattled chief executive, resigned on the heels of a New York Times report detailing a frat-boy-like atmosphere in the Tribune Co. executive suite.
Read also: 'Frat Boy' CEO Randy Michaels Out at Tribune
"Now, it is time to move forward and focus on the future," the note continued. "Our business units are in the process of developing their financial and operating plans for 2011 and we are headed into the most important time of the year for our advertising partners. We’re also making progress on resolving our Chapter 11 bankruptcy cases."