Tribune's reorganization plan seen headed for creditors vote

The Tribune Company modified the description of its reorganization plan on June 4. Delaware Bankruptcy Judge Kevin Carey directed Tribune to change the description of how it treats holders of bridge loans.

Under the proposed plan, the bridge loan lenders would receive a recovery between zero and 4.6 percent of their $1.6 billion in claims, and they felt the disclosure did not accurately describe their treatment. Tribune plans to turn the company over to senior lenders led by JPMorgan Chase. Those lenders funded the take over of the company by real estate developer Sam Zell in 2007 in a $8.2 billion leveraged buyout. Tribune filed for bankruptcy about a year later. The company also plans to set aside about 7 percent of its post-bankruptcy equity for bondholders led by Centerbridge Capital Advisors to satisfy their legal claims against the management and leveraged buyout lenders. An examiner is expected to report by July 12 on potential legal claims stemming from the leveraged buyout, which could change the case if it is determined valuable claims could be brought against the lenders, management and others.