NEW YORK (Reuters) – Tribune Co bondholders led by hedge fund Aurelius Capital Management on Monday filed a revised bankruptcy reorganization plan for the media company, hoping to overcome objections by senior creditors.
The revised plan calls for lower sums to be set aside to address litigation stemming from Tribune’s $8.2 billion leveraged buyout in 2007, which was led by real estate developer Sam Zell.
Some senior creditors had complained that too much of the equity in a reorganized Tribune would be tied up while the litigation, which could last for years, proceeds.
Tribune owns newspapers including the Chicago Tribune and Los Angeles Times, and has other media properties including the WGN television superstation. It filed for Chapter 11 protection from creditors in December 2008.
U.S. Bankruptcy Judge Kevin Carey this month described Tribune’s bankruptcy case as deadlocked, as the two creditor groups remained unable to agree on how to split the company’s assets, according to the Chicago Tribune.
Tribune has backed a reorganization proposed by senior creditors led by JPMorgan Chase Co, Oaktree Capital Management and Angelo, Gordon Co. Bondholders including Aurelius oppose this plan.
The senior lenders had argued that putting too much of the company’s value in a litigation trust would
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