JPMorgan stake in Tribune may violate FCC rule

JPMorgan Chase & Co. and its hedge- fund partner will break federal rules limiting media ownership if they win the right to reorganize bankrupt publisher Tribune Co., a lawyer said

JPMorgan and Angelo Gordon & Co. have built stakes in newspaper and broadcast companies that have come out of bankruptcy in recent years, Mark Prak, a lawyer who lobbies the U.S. Congress and the Federal Communications Commission on behalf of television broadcasters, said today in U.S. Bankruptcy Court in Wilmington, Delaware.

“They will violate the FCC media ownership rules,” Prak said. “The interest they have will complicate reorganization.”

Prak was testifying on behalf of Aurelius Capital Management LP, which is opposing a reorganization plan for Chicago-based Tribune sponsored by JPMorgan and Angelo Gordon. Aurelius is sponsoring its own plan. U.S. Bankruptcy Judge Kevin J. Carey must decide which of the two plans to approve.

In court filings, New York-based JPMorgan and Angelo Gordon claimed that their ownership stakes don't violate FCC ownership limitations. Should the FCC rule against them, the companies would adjust their reorganization plan, the companies said.

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