Judge: Expect Tribune reorganization plan confirmation opinion July 13

By Jim Witters

Wilmington, Del., July 11 - Clarification of two issues cleared the way for a written opinion regarding confirmation of the Tribune Co.'s fourth amended joint plan of reorganization, the judge said during a status conference July 11 in the U.S. Bankruptcy Court for the District of Delaware.

Judge Kevin J. Carey said he has a 50-page draft opinion, but he needed information about two matters before issuing a final version. He said he plans to issue the final opinion by July 13.

Tribune attorney James F. Bendernagel said that once the opinion is in hand, the parties will revise the plan and the confirmation order and submit them to the court.

Confirmation of the plan is needed before Tribune can receive the necessary approvals from the Federal Communications Commission to transfer its broadcast licenses to a new ownership group that includes senior creditors Oaktree Capital Management, Angelo, Gordon & Co. and JPMorgan Chase, Bendernagel said.

The plan awaiting confirmation was proposed by the debtors, the official committee of unsecured creditors and lenders Oaktree Capital Management, LP, Angelo, Gordon & Co., LP, and JP Morgan Chase Bank, NA.

The proposed plan is commonly referred to by the parties as the DCL plan. It represents a revision of the plan rejected by Carey in October.

Tribune representatives said they believe the company could exit bankruptcy by the end of the year, with about $7 billion in recoveries for creditors.

Outstanding issues

Carey sought clarification on two issues:

• Former Tribune employees objected to the plan, asserting that it denied them the right to pursue claims against the debtors' estates.

Carey said his reading of the proposed plan was that the plan "enhanced" the rights of current Tribune employees, but remained silent regarding former employees.

David M. LeMay, representing the official committee of unsecured creditors, said that the former employees' rights are not "eliminated or abrogated" in the plan.

The claims of former employees will be treated just as all other general unsecured claims, but not as administrative claims, he said.

• Aurelius Capital Management, LP had objected to language contained in an agreement between the debtors and the creditors committee that restricts the discovery powers of the litigation trustee.

Carey said he agreed with Aurelius that the scope of the discovery requests should be determined by the court. But he also believes the creditors committee "needs some protection" in a case as contentious as this one.

Carey offered the parties suggested modifications to the language in the agreement, and Aurelius agreed to consider the changes.

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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