It’s been nearly three years since real estate magnate Sam Zell drove Tribune to seek bankruptcy protection — the result of his disastrous $8.2B leveraged buyout transactions in 2007. But the broadcasting, publishing and Internet power says its days in the penalty box may soon be over: The company filed a third amended reorganization plan at U.S. Bankruptcy Court in Delaware yesterday that it says has the support of senior unsecured creditors Oaktree Capital Management; Angelo, Gordon & Co; and JPMorgan Chase Bank. The document, released late last night, says that Tribune will ask the court at a conference on Tuesday to hold a December 13 hearing on the proposal, setting it up to be confirmed in February. The media company has “been in bankruptcy too long,” it said in a court filing. Although Tribune owes creditors about $13B, the new proposal says it “incorporates a protocol for resolution of the few remaining disputes.” These disagreements mostly involve how to split $534M owed to junior credit holders including hedge fund Aurelius Capital Management — and Zell. The new plan would let the junior lenders make that decision, which the court could adjust later if it wants. Tribune’s media holdings include the Los Angeles Times, the Chicago Tribune, and 23 TV stations.
UPDATE 1:30 PM: I’ve now had time to do some reporting of my own to put perspective on the Wall Street Journal‘s — and this idea of Peter Chernin taking over Tribune Co is a real longshot. Insiders tell me that Chernin has had one meeting with one creditor who asked him about the CEO job. Chernin said no. Then he was asked about the chairman’s job. Chernin said unlikely. ”They asked him if he would keep an open mind. He said OK,” one of my sources says. “He’s had no meetings or discussions whatsoever with any other creditors, the creditors’ committee, with the board, with management, etc. And he is not part of any process now.” I’m told what’s happening is frankly no different than almost every media deal cooking right now where someone comes to Chernin and asks if he would be willing to run the company. My insiders put the odds of Chernin taking over Tribune Co ”way below 20%”. Meanwhile, the best guess is that the timing for change at Tribune Co is probably February-March at the earliest.
SATURDAY 5 AM: I’ve been traveling only to return to some interesting news reports: now Peter Chernin is on the short list to possibly replace Sam Zell as chairman of the Chicago-based Tribune Co when it emerges from bankruptcy soon. Hollywood always knew that the former News Corp No. 2 who’s now the Fox TV and film mega-producer had a second act in …
UPDATE: Here’s the reason why Michael Eisner is first choice among prospective candidates who could operate Tribune Co once it emerges from bankruptcy: John Angelo of NYC hedge fund Angelo Gordon & Co which is one of the Chicago-based media company’s biggest creditors. (See photo of Angelo, Eisner’s son, and Eisner.) Not only are Eisner and Angelo childhood pals who grew up together. “He was my sidekick from the age of 6,” Eisner said in his autobiography about Angelo, whose mother was in turn Eisner’s mother’s BFF. In the book’s acknowledgements, Eisner equates Angelo with his own sister because they ”have been an important part of my life longer than almost anyone else”. Even now, the two men remain best friends and Angelo’s son Jesse (an editor at the New York Post) is Eisner’s godson. Eisner even devotes a chapter to Angelo Gordon & Co in his forthcoming book, Working Together: Why Great Partnerships Succeed and describes Angelo as someone who “I know as well as perhaps anyone, aside from my own wife and children.”
On Angelo’s advice, Eisner, 68, has been accumulating Tribune Co debt. Tribune Co and its creditors are still struggling to negotiate a settlement. But just last week, the latest round of talks surrounding the disastrous Sam Zell management collapsed. On Friday, Tribune Co is supposed to submit a proposed settlement plan which the court could approve. It’s clear that senior creditors like Angelo Gordon & Co will end up owning Tribune Co because of their $8.6 billion in claims. Meanwhile, Angelo Gordon Co has accumulated several newspaper holdings post-bankruptcies in the last year. Because of the Angelo connection, Eisner was first approached about becoming a member of a reconfigured Tribune board by him. Reports say those conversations led to discussion of a potentially larger role for Eisner with Tribune Co, and today he is being touted for the top job.
David Geffen Goes After LA Times Again? Is He In “Serious Discussions” With Zell? Or Have They Not Spoken In Months?
I’ve written here again and again how much David Geffen wants to own the Los Angeles Times and put it back under local control as well as make it a real must-read. But the Hollywood mogul was rebuffed first by the Tribune Co’s CEO Dennis Fitzimmons and then by current owner Sam Zell. Now Geffen may be looking for a third chance to buy the paper. I’m told by a source that Geffen and Zell are “in serious discussions” regarding a sale. It’s all very hush-hush, but my source tells me: “Cash flow is not being met for the bankers, revenue is in freefall, and the potential liability on the Combs story is huge. Sam feels he bought a bill of goods. Geffen is back in the mix and he’s going to get it for a deep discount. They’re in serious discussions.”
UPDATE: However, Geffen has been on his yacht vacationing in the South Pacific for weeks. And a Geffen insider insists that the DreamWorks partner and Zell haven’t spoken in months.
Some background is needed. I’ve reported previously that, not long before Dean Baquet became the LA Times editor in July 2005, Jeffrey Katzenberg sought a meet-and-greet to announce that Geffen really wanted to buy the newspaper. Baquet was shocked. “How’s he going to feel the first time we review a movie or …