WILMINGTON, Del. (CN) – A bankruptcy judge approved the exit plan of Tribune Co. from Chapter 11 bankruptcy protection nearly four years after the company became insolvent in the wake of a disastrous leveraged buyout led by Chicago real estate mogul Sam Zell.
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U.S. Bankruptcy Judge Kevin Carey’s ruling alternately approves and overrules various objections by creditors opposed to Tribune’s bankruptcy plan. Those opponents include Aurelius Capital Management, Deutsche Bank Trust Company of Americas and Wilmington Trust Company.
Carey noted that the confirmation comes after an “arduous journey” chronicled in three previous decisions.
This was Tribune’s fourth plan, known as the DCL Plan, submitted since the company filed for bankruptcy in December 2008.
Once final revisions have been made to the plan, and the Federal Trade Commission gives its approval, a new ownership group that includes JPMorgan Chase, Oaktree Capital Management, and Angelo, Gordon & Company will take charge of the company.
Opponents to the plan noted that FTC approval could take up to six months or more because the new owners already hold interests in other media companies in the same markets as Tribune.
The FCC prohibits dual ownership of competing media outlets in the same market.
Other opponents to the plan, such as Sam Zell’s EGI-TRB LLC, “will likely pursue their appeals,” Carey noted.
But most of the lower-ranking creditors are pursuing lawsuits concerning the 2007 leveraged buyout through a special trust, which was set up under the Chapter 11 plan during the proceedings.
Those lawsuits take aim at the banks, lenders and advisers that participated or benefitted from the leveraged buyout of Tribune.
Other proceedings seek damages from Zell himself and other officials who led Tribune, as well as large shareholders who benefitted from the buyout.
The special trust was formed following a report filed by a court-appointed bankruptcy examiner who found evidence that the 2007 leveraged buyout might have been a fraudulent conveyance, and that creditors might be able to recover billions of dollars through litigation.
Tribune’s assets are valued at $6.75 billion, according to court documents. Those assets include the company’s publishing division, which has dropped in value from $3 billion to just under $1 billion in just three years, Tribune financial advisers say.
The publishing division includes the once-venerable Chicago Tribune and Los Angeles Times newspapers.
Tribune’s main assets include 23 television stations, worth an estimated $2.9 billion, as well as ownership interests in the Food Network and CareerBuilder.com that are valued at nearly $2 billion.