The New York Times has posted a new staff story on the reports about Tribune's internal preparations to possibly file for bankruptcy protection. The nub:

Tribune is in danger of falling below the cash flow required under its bonds, but it is not clear how seriously Tribune is thinking about seeking bankruptcy protection. Analysts and bankruptcy experts say that the hiring of advisers, including Lazard and Sidley Austin, one of the company’s longtime law firms, could be a just-in-case move, or a bargaining tactic. The company would not comment on Sunday.

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Rating agencies say Tribune’s short-term problem is not in making payments on its debt. Instead, the company is struggling to comply with a requirement that its main debt from its acquisition of the company not exceed nine times its earnings before interest, taxes, depreciation and amortization.

A quarterly test of that compliance is expected at the end of this month. A failure to comply would mean Tribune had technically defaulted, even if it continued to make payments. Technical defaults can sometimes lead to bankruptcy.

Earlier today at LA Observed:
Tribune prepares bankruptcy
Tribune looking at bankruptcy