Tribune lenders call Chapter 11 plan unfair
Tribune Co lenders on Monday labeled the U.S. newspaper publisher's proposed plan to exit bankruptcy unfair and said they deserve the right to propose an alternative.
In a filing in the U.S. bankruptcy court in Wilmington, Delaware, holders of more than $3.6 billion of claims under a 2007 secured credit agreement called Tribune's April 8 announcement that it had reached an accord with creditors premature and misleading.
Tribune had said the agreement purports to settle all potential claims from the company's $8.2 billion leveraged buyout in 2007 led by real estate developer Sam Zell. It said the plan would help it to emerge from bankruptcy this year.
The lenders said the agreement is impossibly tainted by the debtors' attempt to give a free pass to their insiders, including Zell, executives, directors, lenders including JPMorgan Chase & Co, and its official committee of unsecured creditors.
This is a 'settlement' made possible with 'other people's money' -- specifically, that of the credit agreement lenders and other current holders of credit agreement claims left holding the bag, the lenders said.
Tribune spokesman Gary Weitman declined to comment.
Tribune owns the Chicago Tribune, the Los Angeles Times, and other publications, as well as television stations and other properties. It recently sold the Chicago Cubs baseball team.
The case is In re: Tribune Co et al, U.S. Bankruptcy Court, District of Delaware, No. 08-13141.
(Reporting by Jonathan Stempel. Editing by Robert MacMillan)
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