A U.S. bankruptcy judge told Tribune Co and its creditors to aim for a May hearing date for the company's latest proposed creditor payback plan, further extending a long-running bankruptcy that Tribune had tried to end earlier this year.
Judge Kevin Carey said in a court order issued late Thursday in U.S. Bankruptcy Court in Delaware that Tribune and creditors should try to resolve ongoing scheduling disputes "with a view toward a confirmation hearing to be held in mid- to late-May 2012."
Tribune, which filed the proposed exit plan in November with the backing of its unsecured creditors' committee, JPMorgan Chase Bank and a handful of other creditors, had asked for a February hearing.
The plan offers a roughly $500 million settlement with note holders, and would allow the court to resolve potential disputes between creditors over amounts to be paid to various parties without impeding the company's efforts to emerge from bankruptcy.
The Chapter 11 case, filed in December 2008, is already past its third anniversary. Tribune had hoped to confirm a restructuring plan in 2011, but Carey in October rejected Tribune's previous plan, as well as a rival plan from a group of note holders. Carey said neither plan was confirmable under bankruptcy law.
Bought by financier Sam Zell in 2007, the Tribune owns the Los Angeles Times and Chicago Tribune newspapers and more than 20 television stations. Zell's $8.2 billion leveraged buyout of the company is considered by note holders to be the key catalyst in rendering it insolvent.
The case is In re Tribune Co, U.S. Bankruptcy Court, District of Delaware, No. 08-13141.
(Reporting by Nick Brown in New York; Editing by Tim Dobbyn)