Tribune loan agent wants hearing delayed
Tribune Co. is facing the first request to delay the Aug. 30 confirmation hearing where the newspaper publisher is scheduled to seek approval of the reorganization plan.
The agent for the $1.6 billion so-call bridge loan lenders says there isn't enough time to examine witnesses and experts under oath before the current Aug. 13 deadline for filing written objections to plan confirmation. The bridge agent says more time is required because of unexpected conclusions in the 1,000-page examiner's report finding a possibility that some aspects of the 2007 leverage buyout could be attacked successfully as fraudulent transfers.
The bridge agent wants the confirmation hearing set back no more than 90 days. The motion is on the bankruptcy court calendar for Aug. 9.
The bankruptcy judge said at a hearing last week that he wasn't inclined to delay the plan confirmation hearing that's scheduled to begin Aug. 30.
The bridge agent also wants the bankruptcy judges to defer a hearing until confirmation on Tribune's motion for approval of a 2010 management bonus program. The agent says bonuses should be part of the confirmation hearing because some executives were found by the examiner to have engaged in misconduct with regard to the leveraged buyout.
The Internal Revenue Service filed an objection to the treatment of tax claims in the plan.
The examiner's report found some likelihood a court would conclude that debt issued in the final phase of the leveraged buyout in December 2007 could be attacked successfully as a constructively fraudulent transfer. He found less likelihood that the first part of the transaction, in May 2007, could be unraveled as a fraudulent transfer. For a summary of some of the examiner's conclusions, click here for the July 27 Bloomberg bankruptcy report.
Tribune's Chapter 11 plan would settle claims that the $13.7 billion leveraged buyout led by Sam Zell contained fraudulent transfers. The plan is opposed by holders of $3.6 billion in debt who announced their opposition even before the settlement was formally disclosed.
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 Delaware (Wilmington).