Chicago Tribune set to end bankruptcy
REUTERS CHICAGO TRIBUNE Co, the bankrupt publisher of the Chicago Tribune and Los Angeles Times, moved closer to ending its three-year bankruptcy after a judge resolved lingering disputes about the order in which noteholders should be repaid.
Monday’s ruling by Delaware Bankruptcy Judge Kevin Carey also found that the company’s proposed plan to emerge from bankruptcy does not unfairly discriminate against certain creditors.
That could blunt one line of attack against the company’s bankruptcy plan, which could once again come under fire from noteholders when Carey is asked to approve it at a June 7 hearing. “This puts us on a flight path to successful emergence,” said David LeMay, an attorney with Chadbourne & Parke LLP, which represents the unsecured creditors committee in the bankruptcy.
Carey’s 50-page opinion determined the order of repayment among the company’s unsecured noteholders, an issue he left unresolved in key rulings last year because he wanted more evidence.
He found that senior noteholders will be repaid ahead of securities known as Phones, which he determined had a claim of $759.3 million. Carey determined that last in line are the EGI Notes, which are held by financier Sam Zell. Carey also rejected an argument that it amounted to unfair discrimination to divide some of the repayments under the plan evenly between senior noteholders and others, such as trade and retirement claims.