Trib bondholders looking under the hood


A company representing 18% of Tribune bondholders is looking for evidence that the LBO transferring the company to Sam Zell and others was a fraudulent conveyance, in hopes of securing a payday for its clients. Meanwhile, the company’s sale of the Chicago Cubs took a step forward.

According to the company’s own cornerstone Chicago Tribune, a bondholder’s representative, “Law Debenture Trust Co., will get access to documents and emails being collected by counsel to the creditor’s committee, a document filed in Delaware bankruptcy court said. That will give the group the ability to participate in the investigation.”

The goal is to be able to prove that the deal was overleveraged and doomed from the start, making bankruptcy inevitability. That would weaken the claims of senior lenders and give the bondholders a bigger piece of the company’s remains.

The Trib stories says such moves are common and although they rarely are totally successful, they often can be used as a negotiating tool for the bondholders group to crowbar a better deal than they otherwise might get.

As for the Cubs, a bankruptcy judge cleared the way for Tribune’s sale of 95% of its stake in the ballclub to the Ricketts family for $845M. The Ricketts will also get iconic Wrigley Field and Trib’s 25% chunk of Comcast SportsNet Chicago. Tribune will keep 5% of the team and retain broadcast rights.

RBR-TVBR observation: What’s it like for a grave dancer to lie there while a committee of vultures tries to decide who gets to nibble what? Most of us, thankfully, will never know.