Updated at 6:15 p.m. PST.
U.S. Bankruptcy Judge Kevin Carey approved Friday a plan to restructure Tribune Co., the Chicago-based media company that owns the Los Angeles Times, the Chicago Tribune and KTLA and bring an end to its protracted bankruptcy case.
The Wilmington, Delaware-based judge endorsed the plan late Friday three-and-a-half years after the company, burdened with $13 billion of debt, entered Chapter 11 bankruptcy.
Now, the media giant must wait several days for the court to issue a formal confirmation of the plan, according to an email sent to Tribune employees and obtained by TheWrap.
"Between now and our emergence from Chapter 11, there is likely to be some speculation about Tribune's future," CEO Eddy Hartenstein wrote in an email to employees Friday. "Try to ignore it as much as possible — it is extremely important that we continue to remain focused on serving our customers and operating our businesses as efficiently as possible."
The plan was drafted by the company, the Official Committee of Unsecured Creditors and a trio of creditors: hedge funds Angelo, Gordon & Co., Oaktree Capital Management and JPMorgan Chase.
Tribune can now move forward on an effort to win the approval of the Federal Communications Commission to transfer licenses for its television and radio holdings to a new ownership group headed by Oaktree and the two other financiers.
The cash-bleeding company owns major media holdings in large markets like Los Angeles, Chicago and South Florida. To skirt restrictions on owning multiple media outlets in the same city, Tribune secured waivers to those rules. WGN in Chicago, the Baltimore Sun, and a crop of other large, legacy media outlets are marked with the company.
But new owners means new waivers are required.
This is the second time the company has tried to win approval of a reorganization plan that would settle legal claims against the senior lenders that bankrolled the company's 2007 buyout by billionaire real estate tycoon Sam Zell that plummeted Tribune into massive debt.
"As you know, we began the FCC process more than two years ago," Hartenstein wrote, "and we hope the Commission will act swiftly."
The ailing media giant owes its creditors about $13 billion. It is valued at $7 billion, according to court documents obtained by TheWrap.
The company filed for new waivers two years ago, but the FCC's 180-day window to decide was cut short at 74 days because Tribune appeared to be in bankruptcy free-fall.
The FCC process could at least to six months, according to court documents.
If the FCC denies the license transfers, the bankruptcy deal is moot.
"We have a great mix of media assets, our businesses are profitable and we continue making progress on executing our digital and mobile strategies," Hartenstein wrote. "There are a lot of exciting challenges ahead."