Tribune confirmation trial now set for second week

Tribune Co.'s contested confirmation hearing can now drone on for two weeks, the bankruptcy judge told the contending plan proponents at a Feb. 25 hearing.

Tribune, the official creditors' committee and senior lenders Oaktree Capital Management LP, Angelo Gordon & Co. LP and JPMorgan Chase & Co. are proposing one plan. Aurelius Capital Management LP and three indenture trustees have a competing plan.

The confirmation hearing was already scheduled for the week of March 7. The bankruptcy judge told the parties he has now cleared his calendar so the trial can continue through the week of March 14.

The plan proponents told the judge they couldn't complete the trial in five days.

Aurelius characterizes itself the largest holder of bonds issued before the leveraged buyout in 2007. The indenture trustees represent bondholders whose debt predates the LBO.

Tribune contends the Aurelius plan can't be confirmed because it was accepted by only three of 256 voting classes. With one exception, the accepting classes were only those controlled by the pre-LBO noteholders.

Originally, there were four competing plans. Two filed by creditor groups were withdrawn. For a summary of the plans filed by creditors, including the two that were withdrawn, click here for the Nov. 1 Bloomberg bankruptcy report. For details on Tribune's own plan, click here for the Oct. 25 Bloomberg bankruptcy report.

The plans differ in that the Aurelius plan would continue litigation on fraudulent transfer claims resulting from the $13.7 billion LBO in 2007 led by Sam Zell. The Tribune plan settles most claims arising from the LBO. For a summary of some of the examiner's conclusions about possible defects and fraudulent transfers in the LBO, click here for the July 27 Bloomberg bankruptcy report.

Tribune is the second-largest newspaper publisher in the U.S. It listed $13 billion in debt for borrowed money and assets of $7.6 billion in the Chapter 11 reorganization begun in December 2008.

Tribune 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 of Delaware (Wilmington).