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Tribune Co. Files Chapter 11

CHICAGO (CN) - Less than a year after real estate mogul Sam Zell bought the Tribune Co., the publisher of the Chicago Tribune and Los Angeles Times has filed for bankruptcy, drowning in $13 billion in debt - most of which Zell created when he bought the media empire, and set about dismembering it.

The Tribune's 12 newspapers, 23 TV stations, cable channel and other properties will keep operating - as will the Chicago Cubs, also part of the Tribune empire.

Zell, who got rich through real estate, was touted as a genius when he bought the media chain for $8.2 billion last year, taking the public company private and tripling its debt. But newspaper ad revenue continued to plummet - by 19% for Tribune papers in the 3rd quarter of this year - and the national credit crisis was the final blow, despite repeated staff layoffs and Zell's sale of Newsday, the Long Island daily.

Tribune needs to come up with $900 million in interest payments next year, and more than $500 million in principal payments.

After buying it, Zell converted Tribune into an "employee-owned" company, though employees got no say in running the business. The value of their shares may go to zero in the bankruptcy.

Zell put up just $315 million of his own money to buy the $8.2 billion media chain - less than 4% of the sale price. He excluded the Cubs and Wrigley Field from the Chapter 11 filing, so he can keep trying to sell them. Insider-trading accusations against a top suitor, Dallas Mavericks owner Mark Cuban, already have complicated that deal, from which Zell wants $1 billion.

Zell bought the Tribune Co. on Dec. 20, 2007.

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