Tribune bankruptcy slowed by examiner request

* Examiner needs added time for "substantial" report

* Company supports delayed timetable for ending bankruptcy

By Tom Hals

WILMINGTON, Del., June 23 (Reuters) - A court-appointed examiner has requested more time to investigate the Tribune Co leveraged buyout that some blame for its bankruptcy, likely delaying its stay in Chapter 11, according to court documents filed on Wednesday.

Kenneth Klee, a law professor and partner of the Los Angeles law firm of Klee, Tuchin, Bogdanoff & Stern, said he needs about two more weeks to interview witnesses and review documents to prepare his report.

The request to extend the deadline from July 12 to July 27 must be approved by the bankruptcy court.

Klee was appointed in May to evaluate potential claims related to the 2007 leveraged buyout of Tribune, which owns the Los Angeles Times and Chicago Tribune as well as several other newspapers and television stations.

Bondholders have blasted the $8.2 billion takeover, led by real estate developer Sam Zell, as the "virtually no-money-down LBO" and blame Zell and his lenders for the 2008 bankruptcy that could wipe out their investment.

The company has proposed a reorganization plan that would turn over the company to the lenders who funded the buyout.

The company has also proposed giving broad releases from potential liabilities to Zell and buyout lenders. In return for not pursuing potential legal claims, senior bondholders will get a company stake that Tribune estimates is worth about $450 million.

Junior bondholders would get nothing under the plan. They hope the examiner's report turns up evidence that would lead to the voiding of the claims by buyout lenders.

Klee's attorney said in court documents filed on Wednesday that the examiner was not able to begin witness interviews until June and that he now realizes he needs to speak to more people than anticipated.

"A substantial amount of work has been done and a substantial multi-hundred page draft of the report is in progress," said the court filing.

The examiner's request also said he had discussed with Tribune a need to extend the timetable for resolving its bankruptcy.

The examiner's request seems likely to lead to an extension of the deadline for voting on the company's reorganization, currently July 30, and the start of its confirmation hearing, which is set for Aug. 16.

"The examiner's request for an extension of approximately two weeks to file his report is not unexpected," said a statement from Tribune spokesman Gary Weitman. "Although it may delay our confirmation hearing for a short period of time, we are supportive of the request in the interest of enabling the examiner to do a thorough and complete review."

The case is In re: Tribune Co et al, U.S. Bankruptcy Court, District of Delaware, No. 08-13141. (Reporting by Tom Hals, editing by Gerald E. McCormick)