Tribune judge sets bankruptcy exit date

Tribune Co.'s creditors have until Oct. 15 to file alternative proposals for dividing up the ownership of the newspaper and television company so it can pay creditors and exit bankruptcy, a judge said today.

U.S. Bankruptcy Court Judge Kevin J. Carey set a deadline for various groups of warring creditors to file competing reorganization plans. Tribune and more than a dozen lawyers and financial advisers will meet today with a Delaware bankruptcy judge who is leading court-sponsored mediation efforts.

"We'd like to see some kind of a deal break out rather than a dozen plans get filed," said Thomas Lauria, who represents junior lenders owed $1.6 billion.

Tribune has joined two of its largest senior creditors in support a plan to divide the ownership of the company among the lenders who helped finance the publisher's 2007, $8 billion leveraged buyout. Lower ranking creditors want to sue those lenders, claiming that the buyout was a fraudulent transfer that benefited only the banks and Tribune's shareholders.

Fighting among Tribune creditors, who are owed more than $12 billion, intensified after July 27 when a bankruptcy examiner, Kenneth N. Klee, released a report that bolstered the position of lower-ranking creditors. Those creditors, including the noteholders owed $1.2 billion, said JPMorgan Chase & Co. and the other buyout lenders should lose their position among the first to be repaid because of the 2007 transaction.