Tribune creditor Aurelius asks court to appoint Chapter 11 trustee

By Caroline Salls

Pittsburgh, Sept. 14 - Tribune Co. unsecured creditor Aurelius Capital Management, LP has asked the U.S. Bankruptcy Court for the District of Delaware to appoint a Chapter 11 trustee to oversee Tribune's bankruptcy case, according to a Monday court filing.

Aurelius, which on behalf of its managed funds is one of Tribune's largest pre-leveraged buyout bondholders, said the deadline to file avoidance actions in connection with the company's 2007 LBO is Dec. 8.

"It is extremely aggressive to assume that between September 20 (when mediation submissions are due) and December 8, a consensual settlement will be fully negotiated and documented; a disclosure statement will be revised, approved and distributed; and the new plan will be voted upon, will be confirmed and will take effect," Aurelius said in the motion.

As a result, Aurelius said a "truly disinterested fiduciary" will need to identify and institute or obtain tolling agreements for avoidance actions by Dec. 8.

Aurelius said appointment of a trustee would extend the deadline for filing avoidance actions one year, but the deadline for filing non-avoidance actions would not be extended.

In addition, the creditor said appointment of a trustee would help the mediation process because the participants "would know that a truly disinterested fiduciary is rigorously identifying, assessing and preserving billions of dollars of claims."

Aurelius said the company's LBO lenders would participate in the mediation "realizing that they cannot run out the clock or continue to be protected by highly conflicted fiduciaries."

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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