Tribune Faces New Hurdle in Report

A bankruptcy investigator lent credence to claims that Tribune Co.'s $8.2 billion buyout deal in 2007 left it too shaky to survive, throwing up another possible hurdle to the media company's efforts to exit bankruptcy protection after nearly 20 months.

The investigator, Kenneth Klee, said in a report July 26 that it's "highly likely" that Tribune was "rendered insolvent and without adequate capital" as a result of the second half of the debt-reliant deal, which was led by real-estate investor Sam Zell. The company wasn't able to handle the debt load as the economy turned south, and Tribune filed for bankruptcy in December 2008. Klee's findings could embolden a group of creditors that have sought to unravel Tribune's plan to exit bankruptcy later this summer largely owned by a group of financial firms including J.P. Morgan and distressed asset fund Angelo Gordon & Co.