Tribune Paid Bankruptcy Advisers $233 Million Since Filing for Protection
Tribune Co. (TRB), the biggest news media company in bankruptcy, paid lawyers and other advisers $233.3 million since filing for court protection from creditors in December 2008.
The two main law firms in the case collected almost half of all the money spent to reorganize the newspaper and television company, according to records filed yesterday in U.S. Bankruptcy Court (14001L) in Wilmington, Delaware.
Sidley Austin LLP (1119L), Tribune’s main law firm, received $68.9 million in fees and expenses while Chadbourne & Parke LLP (1224L), which represents unsecured creditors, was paid $42.2 million. Alvarez & Marsal LLC, Tribune’s financial adviser, received $18.1 million.
Tribune, the Chicago-based owner of the Los Angeles Times and the Chicago Tribune newspapers, filed for bankruptcy in December 2008, one year after a leveraged buyout led by real- estate billionaire Sam Zell.
Since then, the company and hedge funds holding Tribune’s senior debt have fought to win approval for a plan to divide ownership among the lenders that financed the $8.3 billion buyout. Pre-buyout creditors oppose that plan, claiming Zell’s deal was doomed from the start.
Tribune, valued earlier this year by the company at more than $7 billion, owes creditors about $13 billion.
U.S. Bankruptcy Judge Kevin Carey rejected Tribune’s latest reorganization plan in October, citing technical legal flaws. Carey said he would approve the main settlement upon which the plan is based. That settlement would avoid a lawsuit against Tribune’s main lenders, including JPMorgan Chase & Co (JPM), by the committee of unsecured creditors.
Tribune will seek approval of a new plan based on the settlement in May.
Gary Weitman, a Tribune spokesman, declined to comment on the fees. In bankruptcy cases, the debtor pays its own legal fees, along with those of any official creditor committees.
Lehman Brothers Holdings Inc. (LEHMQ), which filed the biggest U.S. Bankruptcy in history in 2008, paid about $1.6 billion in fees as of last month. That included more than $500 million collected by Alvarez & Marsal, according to a filing with the U.S. Securities and Exchange Commission.
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 at firstname.lastname@example.org