Tribune wants to cap supplier compensation in bankruptcy

An ad hoc group of trade suppliers to Tribune Co. objected to the publisher's disclosure statement, saying their promised 100 percent payment is “illusory.”

In a bankruptcy court filing last week, the ad hoc group points out that Tribune's plan, one of four vying for approval, says there are $1 billion in trade claims on file. Although trade suppliers are to receive full payment, the Tribune plan imposes a $150 million cap on payments to the class. The ad hoc group says Tribune's disclosure statement lacks any explanation for how or when claims in the class will be reduced to the estimated $85 million to $150 million.

Looking at disclosure materials for all four plans, the ad hoc group says they are “largely incomprehensible.” The group wants its constituents to receive a “short statement” saying what they will receive and when. They also want to know what the initial percentage distribution will be.

The hearing to approve disclosure materials is set for Nov. 29.

Tribune, the second-largest newspaper publisher in the U.S., listed $13 billion in debt for borrowed money and assets of $7.6 billion in the Chapter 11 reorganization begun in December 2008. It owns the Chicago Tribune, Los Angeles Times, six other newspapers and 23 television stations.

The case is In re Tribune Co., 08-13141, U.S. Bankruptcy Court, District Delaware (Wilmington).