Tribune Co. has filed a reorganization plan under which it would keep its newspapers and broadcast stations while wiping out most of its debt, but two groups of lenders are objecting.
If the plan is approved, ownership of the company would go to a lenders group that includes JPMorgan Chase & Co. and Angelo, Gordon & Co. They support the plan and an underlying settlement over allegations of fraud in financing the 2007 leveraged buyout that left Tribune in debt.
Tribune, which publishes the Los Angeles Times, Chicago Tribune, and other papers and owns TV and radio stations, calls the settlement crucial for it to leave Chapter 11 bankruptcy.
The plan came together 16 months after Tribune filed for protection because it could not repay $12.7 billion.
Two groups of lenders who say they are owed nearly $5 billion combined appear determined to object to the plan. One group said Tribune’s announcement was premature and misleading. Those creditors, who say they are owed more than $3.6 billion, include Oaktree Capital Management, Goldman Sachs Loan Partners, and Marathon Asset Management.
A separate group — junior bondholders represented by Wilmington Trust Co. — allege that JPMorgan Chase, Bank of America, and other banks that financed the buyout engaged in fraud because they knew the debt would leave Tribune insolvent. Those creditors hold $1.2 billion in bonds they stand to lose.
Tribune said it settled with a senior bondholder, Centerbridge Partners, which holds 37 percent of Tribune’s outstanding senior bond debt. It would get a 7.4 percent stake in Tribune.
Tribune said JPMorgan and Angelo, Gordon, which stand to get over a 91 percent stake in the company, agreed to the plan.
The junior bondholders would get nothing.