Tribune Co. Emerges From Bankruptcy

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Tribune Co., owner of the Chicago Tribune, Los Angeles Times and six other daily papers, emerged from bankruptcy, four years after a doomed leveraged buyout by billionaire Sam Zell led to Chapter 11 proceedings.

Distributions to creditors have been initiated, the Chicago-based company said today in a statement. As part of its exit from bankruptcy, Tribune Co. also closed on a new $1.1 billion term loan and a $300 million revolving credit line.

The company is now in a position to begin a wide-ranging sale of assets including stakes in the Food Network and CareerBuilder Inc., newspapers including the Times and the Tribune as well as real estate, Lance Vitanza, managing director at CRT Capital Group LLC, said in a interview.

“It’s all for sale,” Vitanza said. “If they reorganize around anything it will be the TV assets, but we wouldn’t be surprised if they sell those too.”

In addition to eight daily newspapers, Tribune Co. owns 23 television stations and stakes in more than 50 websites.

Peter Liguori, a Tribune Co. board member and former Fox Broadcasting Co. chairman, is expected to be the new chief executive officer when current CEO Eddy Hartenstein gives up his position after the company’s next board meeting, Vitanza said.

Liguori, 52, who was named to Yahoo! Inc.’s board earlier this year, is a consultant at private equity firm Carlyle Group LP and previously served as Discovery Communications Inc.’s chief operating officer.

Advertising Slump

Gary Weitman, a Tribune spokesman, declined to comment.

Tribune Co. filed for bankruptcy after Zell, a real-estate developer, orchestrated an $8.3 billion leveraged buyout of the company in 2007, just before a global recession and a slump in print advertising devastated the newspaper industry.

The buyout loaded Tribune Co. with debt, and Zell failed to pull off a turnaround of the newspapers. He put the company into bankruptcy in December 2008, triggering a court fight between bondholders who held Tribune’s pre-buyout debt and the lenders who funded the takeover. A settlement approved by the bankruptcy court allowed the older creditors to try to recover some of their losses by pursuing lawsuits against shareholders and managers, including Zell.

In November, Tribune Co. won approval from the Federal Communications Commission to transfer its television and radio licenses to new owners -- including JPMorgan Chase & Co., Oaktree Capital Management LP and Angelo, Gordon & Co. -- the last hurdle to emerging from bankruptcy. U.S. Bankruptcy Judge Kevin Carey accepted Tribune’s proposal to divide ownership of the newspaper and television company among its lenders in July.

New Owners

Asset sales will be the quickest way JPMorgan, Oaktree and Angelo, Gordon & Co. can profit from their new ownership stakes, Vitanza said.

“They will get maximum value by breaking the company into little pieces and selling it off piecemeal,” Vitanza said.

The company’s owners have been seeking an adviser for a possible sale of at least some of its newspapers, people familiar with the situation said earlier this month. Rupert Murdoch, chairman and CEO of News Corp., plans to take a close look at Tribune Co.’s newspaper assets once they’re available, according to a person with knowledge of his thinking.

Tribune Co.’s board -- Bruce Karsh, Ken Liang, Peter Murphy, Ross Levinsohn, Craig A. Jacobson, Liguori and Hartenstein -- will meet in the next several weeks, the company said. The directors will ratify the company’s executive officers at that time. Until then, Hartenstein will remain in the CEO job, Tribune Co. said.

“Tribune emerges from the bankruptcy process as a multi-media company with a great mix of profitable assets, strong brands in major markets and a much-improved capital structure,” Hartenstein said in the statement.