Tribune pre-LBO bondholder Aurelius files competing Chapter 11 plan

By Caroline Salls

Pittsburgh, Nov. 1 - Tribune Co. bondholder Aurelius Capital Management, LP filed one of three competing plans of reorganization submitted Friday for Tribune's bankruptcy case, according to a filing with the U.S. Bankruptcy Court for the District of Delaware.

Aurelius said its plan will allow the company to emerge from bankruptcy more quickly.

Under the Aurelius plan:

• Three distinct trusts will be created on the plan effective date, including a litigation trust, a distribution trust and a creditors' trust. The initial funding from the distribution trust will come from a $40 million company contribution;

• Holders of debtor-in-possession facility claims, administrative expense claims and priority tax claims will be paid in full in cash;

• Priority non-tax claims and other secured claims will be reinstated;

• Holders of step-one senior loan claims will receive a share of an leveraged buyout debt reserve as an initial distribution as well as class 1C distribution and creditors' trust interests;

• Holders of step-two senior loan claims will receive a share of the LBO debt reserve, but only if a senior loan claim sharing resolution is decided in favor of these lenders, as well as class 1D distribution and creditors' trust interests;

• The amount of the reserve allocated for bridge loan claimants will be placed in a distribution trust reserve to be distributed under litigation distribution orders. The bridge loan lenders will receive class 1E distribution and creditors' trust interests;

• Senior noteholders will receive a share of a parent distributable enterprise value, plus a share of initial distributions otherwise earmarked for the EGI-TRB LLC notes class and the Phones notes class under subordination provisions;

• Holders of other parent claims will receive a share of the parent distributable enterprise value, provided, however, that if they vote to accept the pre-LBO debtholder plan, they will have the right to put their claim to a claims buyer in exchange for 15% in cash. Those that did not elect the put option will also receive class 1G distribution and creditors' trust interests;

• EGI-TRB noteholders' and Phones noteholders' shares of the parent distributable enterprise value will be turned over to the senior noteholders, with the remainder to be placed in distribution trust reserves. These noteholders are slated to receive trust interests, but those interests will be allocated under subordination provisions; and

• The initial distribution amount for holders of subordinated securities claims will be placed in a distribution trust reserve for distribution under litigation distribution orders. These creditors will receive class 1K distribution trust interests, as well as class 1K creditors' trust interests if they do not make a non-contribution election.

Tribune, a Chicago-based media company, filed for bankruptcy on Dec. 8, 2008. Its Chapter 11 case number is 08-13141.

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