Tuesday, October 12, 2010
Tribune Co. Makes Progress With Several Creditors
According to chicagobreakingbusiness.com, the new pact includes a group of senior lenders who had been holding out on a compromise, the company said, as well as the Official Committee of Unsecured Creditors in the case, who represent junior creditors.
Still absent from the settlement, however, are several key junior creditor groups including major bondholder Aurelius Capital Management, a litigious New York hedge fund known for disrupting large bankruptcy cases. Sources close to Aurelius have said the fund plans to file its own plan by the court imposed Oct. 15 deadline.
The company said the new pact was worked out with the help of the court-appointed mediator in the case, U.S. Bankruptcy Judge Kevin Gross. It was blessed by a special independent committee of Tribune Co.’s board.
A key breakthrough in the plan is that it calls on senior lenders led by JPMorgan Chase to increase up-front payments to junior bondholders like Aurelius by $120 million, bringing their recovery to $420 million, or 32.73 cents on the dollar, the company said.
In return for those payments, the lenders would get releases from exposure to litigation related to the second step of Tribune Co.’s ill-fated 2007 leveraged buyout.
Read more here.
Posted by Tom Benson at 1:25 PM