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The plan approved Friday addressed those concerns. Many of the disputes in the case centered on a 2010 conclusion by a court-appointed examiner that the final steps of Tribune's buyout probably constituted fraud. Following the bankruptcy filing and the examiner's ruling, JPMorgan, Oaktree, and Angelo Gordon, as holders of Tribune's senior loan debt, worked with the company and its committee of unsecured creditors to fashion a reorganization plan. While Tribune's plan shields JPMorgan and other lenders from lawsuits related to the buyout, it allows junior creditors to pursue buyout-related claims against other parties. Those include Zell, other Tribune officers and directors, and Tribune stockholders who sold their shares in the buyout. Those junior creditors include Aurelius Capital Management, a hedge fund that spearheaded opposition to Tribune's plan. Aurelius and other dissident creditors argued that JPMorgan and other lenders that financed the buyout were well aware of Tribune's shaky financial situation in 2007 and were escaping legal liability too easily under Tribune's plan. The court-appointed examiner found that a court presiding over a buyout-related lawsuit is "highly likely" to conclude that the final stage of the buyout would leave the company insolvent. At the time the buyout was completed in December 2007, Tribune's liabilities exceeded its assets by $788 million, according to the examiner, who found evidence "suggesting that the lead banks suspected, and some may have even believed, that the Step Two transactions would render Tribune insolvent or close to insolvent." Despite weakness in advertising, Tribune Co. has been profitable. In a four-week period ending May 20, Tribune Co. reported net income of $27.3 million on revenue of $246 million.
[Associated
Press;
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