Aug 22 Tribune Co creditors won a stay Wednesday
of last month's order confirming the company's plan to exit
bankruptcy, so long as they pay a $1.5 billion bond.
U.S. Bankruptcy Judge Kevin Carey in Wilmington, Delaware
gave the creditors until Aug. 29 to post the bond in order to
keep the plan on hold while they pursue an appeal. The judge
said it would be hard to "unscramble the egg" if he let the plan
become effective before the appeal.
Creditors including Aurelius Capital Management LP had
appealed Carey's July 23 decision signing off on the plan for
the publisher of the Chicago Tribune, Los Angeles Times and
Auerlius, which has been leading the opposition to the plan,
has argued it and a related settlement would force bondholders
to accept only $369 million for $2 billion to $2.3 billion in
Aurelius said the payout is "far below the lowest rung in
the range of reasonableness."
It is unclear if the creditors can pay the massive bond,
though. Tribune CEO Eddy Hartenstein told employees in an email
Wednesday that the bondholders had at a hearing Friday
"indicated that they would be either unwilling or unable to post
such a bond."
But Hartenstein said Tribune expected they may decide to
appeal the decision to the U.S. District Court in Delaware.
Stephen Sigmund, a spokesman for Aurelius, declined comment.
Tribune's emergence from bankruptcy remains conditional on
the Federal Communications Commission approving transferring
broadcast licenses to new owners.
The case is In re: Tribune Co et al, U.S. Bankruptcy Court,
District of Delaware, No. 08-13141.