Tribune Has Until March 31 to File Reorganization Plan

Tribune Co. has until March 31 to file its reorganization plan to the U.S. Bankruptcy Court in Delaware, according to a corporate memo posted on Romenesko.

From: Tribune Communications
Sent: Thursday, February 18, 2010 12:01 PM
Subject: Message from Randy and Gerry/Court Hearing Today

Today the U.S. Bankruptcy Court for the District of Delaware agreed to give us until March 31 to submit our plan of reorganization to the Court. Although we are close to filing a plan, we think that additional discussion with our creditors will be beneficial. We're still hopeful of reaching a settlement that is acceptable to all our creditors and we believe we are making progress.

The Court will hear arguments on motions related to Tribune's 2007 going-private transaction and a request to appoint a special examiner on April 13.

There will be some media coverage of today's court hearing, and during the next several weeks you can expect to see continued public posturing as negotiations continue. This is not unusual. As you have throughout this process, please stay focused on your job-continuing to serve our users, readers, viewers, listeners and advertisers.

We'll continue to keep you updated in the days ahead.

Randy and Gerry

Tom Hals of Reuters reports that "at the start of Thursday's hearing, the owner of the Los Angeles Times and Chicago Tribune said it would reduce the requested extension of exclusivity to the end of March from its original request to extend it into June."

Judge Kevin Carey approved the request to extend exclusivity, saying it may be Tribune's "last best chance" to resolve seemingly entrenched disputes.

The company now has until the end of next month to resolve the main issue of its bankruptcy, the role of its 2007 $8.2 billion leveraged buyout that was led by Sam Zell, a real estate developer.

The official committee of unsecured creditors have blamed banks that financed the deal for the company's bankruptcy, saying they knew the buyout debt would leave it insolvent.

The committee has requested permission to begin litigating against holders of secured claims for their role in the leveraged buyout, arguing the company has not been willing to do so.

If proven, the litigation, which one group of secured claim holders called the "World War III" of bankruptcy, could subordinate or disallow billions of dollars of secured claims.