A group of Tribune Co lenders on Monday labeled the U.S. newspaper publisher's proposed plan to exit bankruptcy unfair and said they deserve the right to propose an alternative.
In a filing in the U.S. bankruptcy court in Wilmington, Delaware, two dozen lenders holding more than $3.6 billion of claims said it was premature and misleading for Tribune on April 8 to announce an accord with creditors that would help it emerge from Chapter 11 protection this year.
The lenders urged U.S. Bankruptcy Judge Kevin Carey to reject Tribune's effort to extend its exclusive period to file a reorganization plan without creditor interference through April 30. They said they could propose a fairer and less rank alternative.
Tribune spokesman Gary Weitman, declined to comment. The company is expected this week to file its proposed reorganization plan.
The unhappy lending group includes hedge funds that say they hold 42 percent of the $8.7 billion claims under a 2007 secured credit agreement. Its members include Goldman Sachs Loan Partners and Oaktree Capital Management LP, among others.
Tribune owns the Chicago Tribune, the Los Angeles Times and other publications, as well as some television stations. It sold the Chicago Cubs baseball team earlier this year.
The Chicago-based company on April 8 announced an agreement purporting to settle potential claims arising from its $8.2 billion buyout in 2007, led by real estate developer Sam Zell.
Senior credit facility lenders would control 91 percent of stock in a reorganized company whose value is estimated at $6.1 billion.
The dissenting lending group said the agreement is impossibly tainted by Tribune's attempt to give a free pass to insiders including Zell, executives and large creditors including JPMorgan Chase & Co and bondholder Centerbridge Capital Advisors.
This is a 'settlement' made possible with 'other people's money' -- specifically, that of the credit agreement lenders and other current holders of credit agreement claims left holding the bag, the lending group said.
An official committee of unsecured creditors also supports Tribune's agreement, while some junior bondholders oppose it.
JPMorgan and Centerbridge did not immediately return requests for comment. The lending group separately asked Carey to order Centerbridge to produce a variety of documents.
Tribune filed for bankruptcy protection on December 8, 2008.
The case is In re: Tribune Co et al, U.S. Bankruptcy Court, District of Delaware, No. 08-13141.
(Reporting by Jonathan Stempel; Additional reporting by Tom Hals; Editing by Robert MacMillan)