Tribune noteholders question allocation ruling; trustee appeals order

By Caroline Salls

Pittsburgh, April 24 - Tribune Co. tendering noteholders Citadel Equity Fund Ltd. and Camden Asset Management have asked the U.S. Bankruptcy Court for the District of Delaware to reconsider or clarify its order regarding allocation disputes, according to a Monday court filing.

The noteholders said they want the court to clarify two issues raised by its decision, including whether the court intended to affect the rights and remedies of the tendering noteholders in specified state law fraudulent conveyance litigation and whether the court intended to fix or establish the classification of the claims of tendering noteholders in any Tribune Chapter 11 plan.

The tendering noteholders said "the decision is silent on these issues."

"The decision could, however, arguably be construed to constitute rulings that affect, or have a substantive impact on, the existing state claim fraudulent conveyance or transfer litigation pending in the MDL court and/or establish the classification of the tendering noteholders' claims under any Chapter 11 plan," the noteholders said in the motion.

In addition, Phones indenture trustee Wilmington Trust Co. has appealed the allocation disputes ruling, according to a separate court filing.

As previously reported, the court issued the allocation ruling on April 9 and said the claim amount for Phones noteholders in Tribune's case should be more than $759 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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