Tribune Facing Legal Battle With Creditors

The Tribune Company will have to wait another week before its reorganization plan is sent to creditors for a vote, and the plan will have to include letters warning that approval will lead to protracted legal battles, a judge ruled on Thursday.

Holders of both senior and junior claims made it clear at a bankruptcy court hearing that Tribune faced a legal slog before it exited Chapter 11. The company, which owns The Chicago Tribune and The Los Angeles Times, has proposed turning over its operations to investors holding $8.7 billion in senior loans, while leaving little for other creditors holding more than $3.6 billion in claims. Those senior loan claims stem from the company's 2007 leveraged buyout that put the real estate developer Sam Zell in control. Bondholders want to pursue legal claims against the sponsors of that deal, who they contend are responsible for landing the company in bankruptcy and wiping out their investments.