Tribune creditors bring their own restructuring plans to court

Disgruntled Tribune Company bankruptcy creditors filed three new restructuring plans aimed at toppling a company-sponsored plan already on the table. The new plans arrange parties that have battled among themselves for nearly two years into four rival camps and define the terms of conflict as the Chapter 11 proceeding moves toward either a broader settlement or years of litigation.

• One new plan, which calls for all-out litigation, came from a group of junior bondholders led by Aurelius Capital Management and was joined by a subordinate group of investors who hold junior bonds known as the PHONES. Together those group represent more than $2 billion in claims.
• Another plan, which disputes a key sharing provision included in the senior credit agreement, came from a group of senior creditors dubbed the Step-One Credit Agreement Lenders, or SoCal, that includes hedge funds like Alden Global Capital and Greywolf Capital. They hold more than $800 million in claims.
• The third plan was filed by a group of bridge loan holders led by King Street Capital, which has about $1.6 billion in claims. Its document proposes a series of settlements instead of a single, all-inclusive one.

These plans will compete against one filed Oct. 22 by Tribune Co. and the biggest senior creditors in the case: Oaktree Capital Management, Angelo, Gordon & Co. and a group of senior lenders led by JPMorgan Chase. They have claims of more than $8 billion. The plan, which is also supported by the Official Committee of Unsecured Creditors in the case, represents the broadest attempt yet to settle a thicket of legal claims related to the disastrous 2007 leveraged buyout led by real estate magnate Sam Zell.