Tribune to file new reorganization plan after deal fails

Tribune Co. said it will rewrite its reorganization plan after a deal by some lenders to divide the bankrupt publisher among themselves fell apart.

Company attorney James Conlan said the company must again delay the start of a court battle that may determine which group of creditors will control the company once it exits bankruptcy. Conlan said the company has been excluded from a new round of talks being held by various creditor groups.

Tribune will instead file a new plan designed to attract as much creditor support as possible, Conlan told U.S. Bankruptcy Judge Kevin J. Carey in Wilmington, Delaware, at a hearing Aug. 20.

A group of lenders, including JPMorgan Chase & Co., had agreed to support the company's current reorganization plan. That plan would have given those lenders and some other creditors more than 90 percent of Tribune once the newspaper and television company exited bankruptcy.

That deal was terminated, Conlan said. The agreement fell apart after a report by court-appointed examiner Kenneth N. Klee found part of the company's 2007 buyout may be a fraudulent transfer.

In bankruptcy, a fraudulent transfer means a company took on debt that it knew it could not repay, or got nothing of value in return for the borrowing.

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