Tribune Creditor Showdown Gets High Court Deferment

(CN) – The Supreme Court deferred a ruling Tuesday on whether to take up an appeal by unsecured creditors of the bankrupt Tribune Co.

Led by Deutsche Bank, the creditors brought an unsuccessful suit in New York against Tribune shareholders that siphoned more than $8.2 billion from the company through a failed leveraged buyout.

Shortly after the Second Circuit affirmed dismissal of their claims in 2016, the creditors petitioned the Supreme Court for a writ of certiorari.

On Tuesday, Justices Anthony Kennedy and Clarence Thomas noted that they would defer consideration of the petition in light of this court’s recent decision in an unrelated bankruptcy case.

This past February, in Merit Management Group LP v. FTI Consulting Inc., the court ruled that bankruptcy trustees have the power to undo certain financial transfers completed before a company went bankrupt.

In light of this precedent, the justices invited the Court of Appeals or the District Court to “consider whether to recall the mandate, entertain a Federal Rule of Civil Procedure 60(b) motion to vacate the earlier judgment, or provide any other available relief.”

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