Tribune's plan, endorsed by several of the company's largest creditors, would transfer ownership of Tribune Company — owner of the Los Angeles Times, KTLA and numerous other media outets around the U.S. — to a group of hedge funds and banks based in LA and New York. U.S. Bankruptcy Judge Kevin Carey stated his intention in a memorandum on Friday. From the joint Chicago Tribune and Times story:
The approval of Tribune's restructuring under Chapter 11 would represent the beginning of the end of a case that has left the company in limbo since December 2008.
Tribune filed for bankruptcy less than a year after Chicago billionaire Sam Zell took the company private, saddling it with $13 billion in debt just as the Great Recession began. Since then, Tribune has lost thousands of employees, endured an embarrassing management crisis and, like all traditional media companies, struggled to adjust to a new marketplace in which people increasingly get their news from computers and mobile devices.
The restructuring plan that Carey said he would approve would put the company in the hands of a group of senior creditors led by Oaktree Capital Management, Angelo Gordon & Co. and JPMorgan Chase & Co. And it would launch a fresh period of uncertainty for Tribune: The new ownership group would move to appoint its own board of directors and decide what to do with the company's media properties, which include 23 broadcast TV stations and eight daily newspapers.
The story mentions that Los Angeles billionaire Eli Broad has said he might want to assemble a local ownership group to buy the Times. Tribune boss Eddy Hartenstein sent this message to the troops, in Los Angeles and elsewhere.
Today the judge overseeing our Chapter 11 process issued his opinion in the case and approved the amended plan of reorganization proposed by the company, its senior lenders, and the official committee of unsecured creditors.
In the next several days the court will issue a formal order confirming the plan. Following the issuance of the confirmation order, the next important step is to secure the approval of the Federal Communications Commission for the transfer of our broadcast licenses and the extension of waivers in markets where we own a newspaper and one or more television stations. As you know, we began the FCC process more than two years ago, and we hope the Commission will act swiftly.
Between now and our emergence from Chapter 11, there is likely to be some speculation about Tribune’s future. Try to ignore it as much as possible—it is extremely important that we continue to remain focused on serving our customers and operating our businesses as efficiently as possible. We have a great mix of media assets, our businesses are profitable and we continue making progress on executing our digital and mobile strategies. There are a lot of exciting challenges ahead.
As I said last month at the conclusion of the confirmation hearing, I want to thank you for your continued dedication to ensuring that Tribune remains vital and relevant to our customers, readers, viewers, listeners and communities for years to come. You are individually and collectively this company’s greatest asset.
We’ll keep you updated on our progress.