Wednesday, October 4, 2023
Courthouse News Service
Wednesday, October 4, 2023 | Back issues
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Possible Change in Control at Tribune

WILMINGTON, Del. (CN) - The New York Times reported that Tribune Co. CEO Randy Michaels is expected to resign today at the request of the board of directors. An unidentified person directly involved in the matter told the Times "the board had lost confidence in the ability of Mr. Michaels to lead the troubled company."

If accurate, Michaels would be the second top executive to leave the company in a matter of days.

On Friday, Chief Innovation Officer Lee Abrams resigned after sending a memo to employees with a link to a sexually offensive website, a video newscast parody titled "Sluts."

In a devastating story last week, the Times described Tribune's new management as promoting a frat-boy culture that sought to shake up the traditionally conservative Tribune, owner of The Chicago Tribune, Los Angeles Times and other major dailies and TV stations.

Sam Zell bought the company in 2007 in a leveraged buyout that saddled the company with enormous debt; in less than a year Tribune filed for Chapter 11 bankruptcy protection.

Zell hired Michaels, a former radio shock jock, to head the company in December 2009. Both Michaels and Abrams were radio execs with long ties to Zell, back to the 1990s, when Zell helped Michaels buy up several radio stations.

The corporate culture of radio was ushered in at the Tribune not only to shake up the conservative atmosphere but, according to the Times' profile, "to breathe innovation and reinvention into the conservative company."

Frank Wood, a member of the Tribune board, was quoted as saying, "Randy is a tremendous motivator, very charismatic, but he is very nontraditional," and "he has the kind of approach that motivates many people and offends others, but we think he's done a great job."

But after nearly 2 years of bankruptcy proceedings and employee morale described as low, it appears the board is ready to change leadership, in anticipation of new ownership at the hands of Tribune's creditors.

Last Wednesday, U.S. Bankruptcy Judge Kevin Carey gave Tribune and its new allies a one-week extension to file a reorganization plan.

Through mediation, Tribune secured the backing of OakTree Capital Management, JPMorgan Chase, Committee of Unsecured Creditors and Angelo, Gordon & Co., all of whom will be on board with the new plan.

Also at the Wednesday telephone conference, Judge Carey gave the dissenting creditors one week after the Oct. 22 deadline to file competing plans.

Hearings on the plans are set for mid-November. A mandatory disclosure statement hearing was set for Nov. 29, and that will put the plans up to vote.

December will mark the 2-year deadline for Tribune to exit bankruptcy proceedings.

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