James Conlan, Sidley Austin LLP attorney who represents the Chicago Tribune, told Judge Kevin Carey in Bankruptcy Court in Delaware that he expects a query on the new date of hearing on Friday - but he does not want to be more accurate since Tuesday sensitivity of ongoing talks on the reconstruction plan. The judge agreed with some reservations, in light of current creditors vote on the plan.
"I clearly do not want to lurch from distribution to extension in the middle of the voting process," the judge said, Mr. Carey Conlan during the hearings. "I think that offers confusion.
Confirmation hearing was scheduled for early October, but that was before the release earlier this month, a court expert's report that, based on claims of unsecured creditors of that company in 2007 leveraged buyout, perhaps, left the company insolvent.
This conclusion has restructured leverage between the parties involved in negotiations on the plan, which is unlikely to survive in its current form. The bank lenders and senior lenders, who expected that the main control over Tribune after the company exits bankruptcy may now be forced to give up ownership of the lower-priority creditors.
Wilmington Trust Co., trustee of lower priority that creditors are suing the banks for redemption Tribune and scheduled to do under the current plan, said in a filing this week that the new settlement discussions were "fruitful."
Tribune, which owns major newspapers, including the Chicago Tribune and the Los Angeles Times, as well as 23 television stations, filed for bankruptcy protection in December 2008, a year after the purchase of real estate magnate Sam Zell. Mr. Zell, who is currently chairman of Tribune, said in a court filing last week that he wants his claims paid in full, if Wilmington creditors get nothing.
When the company presented its reorganization plan in April, she had hoped to get out of bankruptcy in September. The judge said that he was opening in November on the restructuring of the confirmation hearing if necessary. The plan shall be subject to creditors' vote and court approval.
