Tribune Mediator Gets Court OK To Try Settlement Talks Again
April 7, 2011 at 4:01 AM (PT)
The CHICAGO TRIBUNE is reporting that the mediator in the TRIBUNE bankruptcy case has asked the court for another chance to broker a settlement between the company and its dissident creditors. Hearings on confirming one of two competing reorganization plans stalled in MARCH, and judge KEVIN CAREY has approved mediator (and fellow bankruptcy judge) KEVIN GROSS' attempt to get things moving again in a meeting MONDAY followed by more confirmation hearings.
After CAREY approved the continued mediation, the senior creditors aligned with TRIBUNE, including JPMORGAN CHASE, OAKTREE CAPITAL MANAGEMENT, and ANGELO, GORDON AND CO., revised their reorganization plan to try and make it more acceptable to the judge and to AURELIUS CAPITAL MANAGEMENT, leader of the opposing junior creditors.
The changes include a different payout option and the elimination of releases of claims against TRIBUNE shareholders who sold their shares in the first step of the controversial 2007 buyout that put the company into SAM ZELL's hands, putting the claims into a litigation trust instead and allowing the junior creditors to prosecute their suits as the company itself emerges from bankruptcy. AURELIUS amended its plan last week but the senior creditors rejected those as "token."