Tribune Company’s protracted bankruptcy isn’t going to be resolved anytime soon. U.S. Bankruptcy Judge Kevin Carey said in a ruling yesterday that he wouldn’t hold hearings to end the case until May at the earliest. Some apparent good news, however, did come out of Carey’s ruling yesterday.
From the LA Times:
In his order, Carey reversed part of a ruling he made in October that seemed to give an advantage to a deeply subordinated class of note holders known as the Phones.
At the time, Carey indicated that the Phones class should be able to recover at least part of a claim with a face value of $1.2 billion, getting its share from money that would otherwise go to Aurelius and other junior creditors.
That opened the door to a parallel demand from Tribune Chairman Sam Zell, whose affiliate owns a similar note. It was Zell who acquired the company in a highly leveraged buyout in December 2007, a deal that landed it in bankruptcy a year later.
On Thursday, Carey reversed himself, saying that the Phones class was not on a par with Aurelius and other junior creditors for purposes of recovering bankruptcy assets.
Carey’s previous inexplicable ruling on Phones could have put Sam Zell in line to receive tens of millions of dollars in bankruptcy payouts. Hopefully this new ruling will put the kaibosh on that possibility. Unless May rolls around and Carey decides to reverse his opinion again.
Previously on FishbowlLA: Sam Zell Could Be In Line for Tribune Co. Bankruptcy Cash