Zell’s request is couched as an objection to the reports creditors will see when they get their ballots to vote on the four competing reorganization proposals for the newspaper publisher and broadcaster. Before the ballots go out, Judge Kevin Carey must find the materials describing the various Chapter 11 plans to the voters contain “adequate information.”
Zell’s objection says it’s not adequate to tell creditors that Tribune’s banks and bondholders and trade creditors all want to sue him. It will only be adequate to tell them that if they sue, they will lose, in the opinion of Zell’s attorneys.
“All of the disclosure statements fail to contain adequate information under section 1125 of the Bankruptcy Code because they do not inform creditors that estate funds — which otherwise would be distributed to them — will instead be wasted by litigation trusts and their lawyers attempting to pursue meritless claims against Sam Zell,” his attorneys wrote in a filing with the Wilmington, Del., bankruptcy court.
Does this sound insane to anyone else?