NYT Story on Tribune Company May Have Killed Bankruptcy Negotiations
The fallout from David Carr‘s story in the New York Times on the Tribune Company’s “frat house” vibe continues. The Chicago Tribune is reporting that mediation talks between Tribune Company and its creditors have broken down yet again. This comes only a week after a mediator backed agreement between the Tribune Co. and its major creditors Oaktree Capital Management LP and investment firm Angelo, Gordon & Co. made it appear as if the Tribune’s bankruptcy exit was imminent. The Tribune puts the blame for the breakdown, in part, on the Times’ story.
The Tribune explains:
Sources close to the situation said that at least three groups, including aggressive hedge fund Aurelius Capital Management and the Official Committee of Unsecured Creditors, are prepared to file separate plans outlining opposing formulas for resolving the 22-month-old case, setting the stage for a renewed battle over splitting up the company’s value.
While a court-ordered mediator has yet to abandon the effort to find a friendly settlement, the adversaries remain deeply divided, these sources said, suggesting the messy case promises to get messier as the sides hunker down for a fight.
“It’s kind of a free-for-all right now,” said one source in the middle of the fray. “Some parties have really dug in the heels.”
It won’t help matters, sources on all sides of the case said, that The New York Times published a front-page story Wednesday highly critical of Tribune Chief Executive Randy Michaels and the culture his team has created at the company.
The story comes atop news in August that the senior creditors who will end up owning Tribune Co. have been talking with possible replacements for the company’s leadership. One example: Michael Eisner, the former chief executive of Walt Disney Co., who has since said he’s not interested.
Although Michaels issued a blanket denial of the Times’ article’s characterization of Tribune Co.’s work environment as a hostile and sexist “frat house,” sources predicted creditor groups looking to discredit management will almost certainly use the article as ammunition.
Previously on FBLA:
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