Tribune Co. creditors begin bankruptcy court fight

The Chicago Tribune parent will wind up under control of the lenders that financed the 2007 leveraged buyout

March 7, 2011

By Ashley Gross

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Creditors of the Chicago-based Tribune Company began battling it out in bankruptcy court in Delaware today. The bankruptcy judge will decide between two competing reorganization plans submitted by creditors.  

No matter which plan wins, the company will eventually be owned by a group of lenders that financed Sam Zell’s buyout in 2007. That group includes J.P. Morgan Chase.  

Media analyst Ken Doctor says once the lenders are in charge, they’ll focus strictly on the bottom line.  

"This is like buying a razor blade company that’s been on hard times," Doctor said. "We can buy it cheap, we can pretty it up and then we can sell it for more than we paid in three years."

Doctor says the new owners will likely try to sell off some newspapers and broadcast outlets. He says they’ll possibly try to merge the rest of the company with another media business to cut costs.