Tribune reaches plan settlement to resolve 2007 going-private claims

By Caroline Salls

Pittsburgh, April 8 - Tribune Co. has reached an agreement that would settle all potential claims arising from its 2007 going-private transactions and is supported by major creditors J.P. Morgan and Angelo Gordon, Tribune's pre-bankruptcy senior credit facility and senior noteholder Centerbridge Partners, according to a company news release.

Tribune said the terms of the settlement, which is also supported by the company's official committee of unsecured creditors, will be incorporated into its plan of reorganization.

"The plan will allow us to resolve these cases without the distraction, expense and delay of protracted litigation, and is in the best interests of Tribune and all of our constituents," chief legal officer Don Liebentritt said in the release.

Tribune chief executive officer Randy Michaels said in the release that the support for the agreement will allow the company to file the plan before a court hearing scheduled for Tuesday.

"It is another significant step forward as we continue to transform our media businesses, attract and retain talented people, and seize opportunities to grow," Michaels said in the release.

Under the plan, senior noteholders would receive 7.4% of the company's distributable value, which would be paid in a combination of cash, debt and stock, and the company's senior credit facility lenders would receive cash and debt, as well as stock representing in excess of 91% of the equity of the reorganized company.

The company said it would emerge from bankruptcy under the proposed plan with its business units intact and with adequate liquidity for operating and capital needs.

Once filed, the plan will be subject to creditor vote and court approval.

The company said it expects to emerge from bankruptcy later this year.

Tribune, a Chicago-based media company, filed for bankruptcy on Dec. 8, 2008 in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 08-13141.

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