WILMINGTON, Del. — The Tribune Co.’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, attorneys said Friday.
The report released last month by a court-appointed examiner forced Tribune and its creditors to rethink a settlement agreement that formed the basis of its reorganization plan.
Under Tribune’s 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 debtor has tried mightily to bring the parties together,” said Tribune attorney James Conlan. “That has not happened.”
Conlan also confirmed that Tribune had not been party to separate negotiations among its creditors.
Tribune will file revisions to its plan by next Friday in a final effort to win the support of creditors. The revisions will be the subject of a hearing on Sept. 15.
