WILMINGTON, Del. (CN) – The Tribune Co. announced at a bankruptcy hearing on Friday that negotiations with its creditors had broken down, so it will submit a new plan without their input. Tribune’s attorney, James Conlan, said the company “tried mightily to bring the parties together,” but to no avail.
JPMorgan Chase and Angelo, Gordon & Co., an investment firm, abandoned the reorganization plan that would have put them in control of Tribune after it emerged from bankruptcy.
Tribune, which owns the Los Angeles Times, the Chicago Tribune and other media outlets, says it will go it alone and submit its new plan by Friday (Aug. 27).
Now 2 years into bankruptcy proceedings, Tribune, through Conlan, said it would ask bankruptcy Judge Kevin J. Carey to make time available in November for approval of the new plan.
Tribune is not alone in seeking to submit a new plan in the bankruptcy proceedings. Creditors say the company has lost its exclusive right to propose a plan under deadline, and the dissenting creditors now can submit their own plans.
Tribune’s plan had been unraveling ever since an independent examiner released his report this month. That report included investigations of the company’s leveraged buyout, led by Sam Zell, which burdened the company with insurmountable debt. Kenneth Klee, the independent examiner, may have found ammunition for bondholders and unsecured creditors. Toward the end of the 1,000-page-plus report, Klee wrote that a court could be “somewhat likely” to find that the second part of the buyout “constituted intentional fraudulent transfers.”
Klee’s role as examiner ended Friday, and was made formal by Judge Kevin Carey, who said to attorneys for Tribune, “He doesn’t want to be your piñata.”
(See Courthouse News’ Aug. 18 story on Klee’s report.)