Sam Zell's plan to emerge from bankruptcy "has unraveled in the wake of an independent report concluding that talks leading up to the company's 2007 leveraged buyout bordered on fraud," the Chicago Sun-Times reports today. Under the Tribune Company plan, JPMorgan Chase and distressed-debt specialist Angelo, Gordon & Co. "would have been among the new owners of the company's media properties, which include the Los Angeles Times, the Chicago Tribune, other daily newspapers and 20 broadcast stations. But attorneys told Delaware bankruptcy judge Kevin Carey on Friday that JPMorgan and Angelo Gordon had dropped out of the agreement, and that talks on a consensual reorganization plan had broken down," the Sun-Times says.
"The debtor has tried mightily to bring the parties together," Tribune attorney James Conlan. "That has not happened."
It may mean that Tribune employees at the Times and KTLA finally escape the clutches of Zell and his management team sooner rather than later, if Zell loses the company. All Tribune media properties are at least profitable, Tribune said today.
By the way: Those past and present Times newsroom staffers who sued Zell have for the most part quietly left as plaintiffs in the case (or died, in the case of Jack Nelson.) The remaining plaintiffs are, as I understand the filings, former Times reporters Dan Neil and Eric Bailey. PDF