Monday, December 08, 2008

Tribune Corporation Files for Bankruptcy

The game's afoot:

Media conglomerate Tribune Co. has filed for bankruptcy protection, pressured by high debts.

The Chicago Tribune's parent company was working with bankruptcy advisers at investment bank Lazard and law firm Sidley Austin to weigh financial options, sources told the Chicago Tribune for this morning's paper.

Tribune Co. has been struggling under a $13 billion debt load since real estate magnate Sam Zell took the company private last December in an $8.2 billion leveraged buyout. The company faces a deadline today on $70 million of unsecured debt it took on before Zell's deal.

In a news release, the company said The Chicago Cubs franchise, including Wrigley Field, was not included in the Chapter 11 filing. Efforts to monetize the Cubs and its related assets will continue, the company said.

This is hardly surprising. But it does raise a lot of questions that would be great to ask someone who has access, someone like Sam Zell or a Crane Kenney.

Despite the Cubs not being part of the filling, will the bankruptcy court have to oversee the disposition of assets?

What does this mean about Major League Baseball approving a new owner?

If Section 363 applies to the sale, does a court approved offer get to be outbid in "higher or better" offers by anyone in the public?

What does this do to the timing of the sale? Faster or more drawn out?

The filing probably means very little in terms of the Cubs operations. The Cubs remain an independent company, bankruptcy remote from the Tribune. But the long term health of the team is tied to the change in ownership. And that's all up in the air right now.

This is where the fun begins.

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