Skip to comments.Lenders may get control of Tribune Co. (Dinosaur Media DeathWatch™)
Posted on 06/08/2009 2:47:27 AM PDT by abb
Chicago-based Tribune Co. and its creditors are in the early stages of negotiating a plan of reorganization in U.S. Bankruptcy Court that sources said likely would transfer control of the troubled media conglomerate from Chicago billionaire Sam Zell to a group of large banks and investors that holds $8.6 billion in senior debt.
The plan is still taking shape, the sources said, and much could change as negotiations continue.
But the general contours of a new capital structure are coming into focus, and the plan centers on a debt-for-equity swap that probably would give the senior lenders a large majority ownership stake in the reorganized company.
A source with knowledge of the situation said the plan would wipe out a $90 million warrant Zell negotiated as part of his $8.2 billion deal to take the company private in 2007. The warrant gives the Tribune Co. chairman the right to buy about 40 percent of the company for $500 million and is the basis of his control over Tribune Co., which owns the Chicago Tribune.
Zell also holds a $250 million note representing a loan he made to the company as part of the going-private transaction. That note, however, is near the bottom of the hierarchy of claims in Tribune Co.'s Chapter 11 bankruptcy case, and the source said it is unlikely it would retain any value as the capital reorganization proceeds.
Bankruptcy experts said the plan's outline raises questions about whether the senior lender group would want to retain Zell and his management team or seek new leadership for the company. It also poses the question of whether Zell would want to stay without a large ongoing stake in the company.
(Excerpt) Read more at chicagotribune.com ...
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Hmmm.... There were no mention of the unions? Will they end up with no stake? It was the pressrooms that made the company great ya know
I’ve not read too much about the situation with the Tribune’s unions. Since they’re in bankruptcy, all that’s up in the air, I suspect.
I’m intrigued with the rise and fall of the Chandler clan. Much like, the Ochs and Sulberger families at the NY Times, the Chandlers built an immense publishing fortune and now is all gone.
Gone with the wind...
I have on my to order list with Amazon a bio of Otis Chandler.
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A little flashback...
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So the banks take over the Tribune from Zell..The same banks that are under the Treasury thumb because of TARP?....start connecting the dots....
Perhaps. But there’s no ‘there’ there. Very little property, plant or equipment to liquidate. The only ‘asset’ that they have is an ongoing concern that distributes ink on paper with paid advertising.
Not long for this world.
Why don’t some Globe employees take the train don to NYC and picket outside Punch’s apartment building?
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From the article: Chicago-based Tribune Co. and its creditors are in the early stages of negotiating a plan of reorganization in U.S. Bankruptcy Court ...
These things almost always take years, unless you are Chrysler and the government is able to screw your creditors. Come back in 18 to 24 months from now to get the real story.From the article: The plan is still taking shape, the sources said, and much could change as negotiations continue.
In other words, this "news article" is a speculative piece, like so much other garbage that is called news these days.From the article: The plan centers on a debt-for-equity swap that probably would give the senior lenders a large majority ownership stake in the reorganized company.
Yep. Secured creditors get everything until their claims are satisfied, unsecured creditors are next, stockholders come last -- if anything remains at that point.From the article: The plan would wipe out a $90 million warrant Zell negotiated as part of his $8.2 billion deal to take the company private in 2007.
Yep. As noted above, stockholders come last.From the article: The plan's outline raises questions about whether the senior lender group would want to retain Zell and his management team or seek new leadership for the company.
That's assuming the Tribune even survives. Most companies with negative cash flow from operations are wound down, unless they can trim some fat somewhere -- like from union contracts. My guess, this was done long before the Tribune filed.Bottom line: The twits are are cooking up a "news article" about themselves, based in part on established legal procedures, and in part on wishful thinking. In doing so, they are merely demonstrating their ignorance of basic business principles and business law.
The question of retaining Zell and his management team is moot. They had their chance and lost. Almost everybody worth having has already moved on.
What a novel concept.
Lenders may get control of a Bankrupt corporation.
Unless 0b0z0 appoints a Newspaper Czar and lets the union members own and control the Newspaper.
Can’t happen. Look at Government Motors and Chrysler.
Good analysis. The negative cash flow is the chicken bone in the throat. They’re almost done for. Notice how the deal to sell the Cubs hasn’t closed yet.
Soon - very soon - there simply won’t be any money in the till to buy paper and ink and pay the pressmen to roll the presses.
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Matters only to zerO.
Otherwise who the hell cares about the bod if the head's dead.
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A lose-lose situation for the union.
Go ahead and file that grievance...the pay cut will be in place no matter.
If they win in at the NLRB in about four years there will be nothing left anyway.