Tribune Judge Sets May Date for Hearing in Final Bankruptcy Court Fight

Tribune Co. (TRB) should face its final court fight over its bankruptcy-exit plan in May, the judge overseeing the reorganization of the media company said.

U.S. Bankruptcy Judge Kevin Carey today asked the company and the hedge funds backing its reorganization plan to work out final scheduling details with opposing creditors.

The Chicago-based newspaper and television company will still face a “significant time lag” before it can exit bankruptcy should it win the final court fight with creditors in May, Tribune said in court papers filed yesterday.

Tribune, the owner of the Los Angeles Times and the Chicago Tribune newspapers, filed for bankruptcy in December, 2008, one year after a buyout led by real-estate billionaire Sam Zell.

Since then, the company and the hedge funds holding senior debt owed by Tribune have fought to win approval for a plan to divide ownership among the lenders that funded the more than $8 billion buyout. Pre-buyout creditors oppose that plan, claiming the buyout was doomed from the start.

Tribune, which was valued last year by the company at about $6.75 billion, owes creditors about $13 billion.

If Carey approves the plan, the company can’t exit bankruptcy until it also wins favorable rulings from the Federal Communications Commission, which oversees Tribune’s television and radio stations, according to court documents. The company didn’t say how long that may take.

The bankruptcy case is In re Tribune Co., 08-bk-13141, U.S. Bankruptcy Court, District of Delaware (Wilmington).

To contact the reporter on this story: Steven Church in Wilmington, Delaware, at schurch3@bloomberg.net.

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net.