New twist in Tribune Co. bankruptcy case could benefit billionaire Sam Zell

For nearly three years, the various combatants in the Tribune Company bankruptcy case haven't been able to agree on much. But few would have anticipated that claims held by Chicago billionaire Sam Zell against the company had any but the slimmest chances of recovery.

Then U.S. Bankruptcy Judge Kevin J. Carey weighed in. In a long-awaited opinion delivered Oct. 31, Carey surprised everyone involved in the case by saying that holders of a deeply subordinated class of notes known as PHONES were being treated unfairly and should be able to recover at least a slice of a claim with an original value of more than $1 billion. Carey didn't mention Zell's $225 million claim, which stems from his failed 2007 leveraged buyout of Tribune Co., but sources said the judge's logic regarding PHONES provides an opening for Zell's lawyers to argue that he, too, should be eligible to collect a partial return because the two securities share similar legal language.