Independent examiner may probe Trib bankruptcy plan

Newspaper publisher Tribune Co. may get an examiner following yesterday's hearing in Delaware bankruptcy court.

Although he didn't rule, U.S. Bankruptcy Judge Kevin Carey said he agreed with the U.S. Trustee's argument as to why there should be an investigation by an independent examiner. Carey told both sides to confer and try to reach an agreement about the scope of an examination.

If there is no agreement, Carey will hold another hearing on April 22 where he will decide whether there should be an examiner.

Tribune filed a proposed Chapter 11 plan on April 12 to implement a settlement negotiated with some creditors. Even before the plan was filed, holders of $3.6 billion in pre-bankruptcy secured debt announced their opposition to the plan and the settlement.

The lenders, who say they have 42 percent of the secured debt under the May 2007 credit agreement, contend that all of the consideration flowing to unsecured creditors would come out of their take, while other participants in the allegedly defective leveraged buyout get away scot-free, protected by releases and indemnities.

Some creditors contend that the $13.8 billion leveraged buyout in December 2007, led by Sam Zell, included fraudulent transfers because operating subsidiaries pledged their assets for new loans and received no commensurate value in return.

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. The company 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).