Tribune bridge lenders negotiate reorganization plan acceptance terms

By Caroline Salls

Pittsburgh, Jan. 28 - Tribune Co.'s bridge lenders have agreed to accept the company/committee/lenders plan of reorganization under a term sheet negotiated as part of court-ordered mediation, according to a Jan. 28 filing with the U.S. Bankruptcy Court for the District of Delaware.

Under the bridge lenders' settlement terms,

• The bridge lenders will receive a share of $64.5 million in cash, and the remaining $13.32 million balance of a bridge lenders' reserve to be established under the plan will be distributed to holders of senior-noteholder and other parent claims;

• The bridge lenders will also receive part of the leveraged buyout lenders' share of litigation trust interests and creditor trust interests;

• Tribune will reimburse up to $7 million of the bridge lender plan proponents' professional fees and expenses; and

• Bridge arrangers and their affiliates who hold bridge loan claims can choose to receive either their share of the $64.5 million payment and receive no additional releases from the other bridge lenders or exchange mutual releases with the other bridge lenders to provide for the unconditional release of any claims against Tribune, the LBO transactions and related financing and the company's Chapter 11 case.

If they choose the bridge release option, the distribution that would have otherwise gone to the arrangers will be allocated to the other bridge lenders.

In addition, if three or more of the arrangers do not elect the release option, the bridge lender cash payment will be increased to $65.5 million, and the expense reimbursement amount will be increased to $8 million.

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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