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.

6-Year-Old Web Story Reposted, Causes UAL Stock to Plunge 75 Percent

A nearly six-year-old Tribune news story discussing United's plans for bankruptcy was reposted on the South Florida Sun-Sentinel and headlined on Bloomberg this morning, causing United Airlines stock to plunge 75 percent in minutes.

David Greising of the Chicago Tribune reports:

The stock, which had closed Friday at $12.30 a share, hit a low of $3 a share before the confusion was cleared up. The stock was trading recently at $8.97, down $3.03 for the day.

After being alerted to the issue Monday morning, the Chicago Tribune removed the story from its online archives which are also accessed by other Tribune Co. newspapers. The South Florida Sun-Sentinel's version of the story was the one that was cited by Bloomberg. The story did not appear on the Web site of the Chicago Tribune.

The original story, published Dec. 10, 2002, appeared the day after United Airlines filed for Chapter 11 bankruptcy, and discussed the company's strategy for emerging from bankruptcy. Though the text of the story appeared on the Sun-Sentinel Web site Monday, the date on the story had been changed to Sep. 6, 2008, according to Joseph Schwerdt, deputy managing editor-interactive for the Sun-Sentinel.

United Airlines officials were obviously angry, and demanded a retraction. "United continues to execute its previously announced business plan to successfully navigate through an environment marked by volatile fuel prices and continues to have strong liquidity," United Airlines said in a statement.

The story was posted at 10:53 a.m. It is not clear how it made its way onto the web with a posting date of Sept. 6, 2008.

James Abels and Tom Van Riper of Forbes reported on the chaos in the newsroom caused by the botched posting:

Micheal Lev, business editor ot the Chicago Tribune, said his staff was scrambling to figure out what was going on with United's stock. He said at the time that he had not heard of the CNBC report that a six-year-old story about United filing for bankruptcy had run on the his paper's Web site. "We've written nothing on United Airlines today," said Lev.

According to news aggregation site SmartBrief.com, the South Florida Sun-Sentinel, a Tribune paper, was the first to run the old story about United. It was posted to its Web site at roughly 1 p.m. Sunday.

Sun-Sentinel Online Editor Joe Schwerdt pulled the story off his site shortly before noon this morning, in response to a call Tribune made to Sun-Sentinel editor Earl Maucker.

"I literally just got word a couple minutes ago that there was problem," says Schwerdt. He says he did not know how the old story was posted as new and was unsure if any other Tribune papers ran it. He declined to discuss details about how his paper publishes stories on weekends. ...

It was unclear whether the old story appeared on the front of the Tribune's site, as some initial reports indicated. Tribune says it did not. Regardless, investors who found the story would have a hard time knowing it was six years old. No date of original publication is listed on the story page on either chicagotribune.com or sunsentinel.com. The only date on the pages was today's: Sept. 8, 2008

On Romenesko's journalism blog, Maucker says reports that an United Airlines bankruptcy story resurfaced on his paper's website on Sunday are wrong. "We never posted the story. We never did anything." A research firm apparently found the old story through a Google search and then posted it to Bloomberg, which caused UAL investors to panic, Romenesko says.

Mary Schlangenstein of Bloomberg reports the news report was posted online by the Sun-Sentinel and was picked up by Income Securities Advisors Inc., said Richard Lehmann, president of the Miami Lakes, Florida-based research firm. Income Securities Advisors distributed the report on the Bloomberg terminal before retracting it and issuing a correction. Bloomberg News also ran a headline citing the Tribune story after the Income Securities Advisors report.