Tribune Co. Not out of the Woods Yet in Bankruptcy Case

Our cheerleading yesterday for newspaper publisher and TV station operator Tribune Co.’s plan to emerge from bankruptcy may have been premature. The company’s announcement of a breakthrough plan to deal with creditors marks progress, but Tribune still has some significan hurdles to clear.

The Chicago Tribune (owned by Tribune Co.) reports:

Although Tribune Co. portrayed the settlement as a hard-won victory, the reorganization plan, which is subject to a creditor vote and court approval, likely faces opposition by some still-disgruntled parties.

The Tribune notes that Tribune Co.’s announcement of a settlement plan left out a key player in the proceedings — distressed-debt investor Oaktree Capital, which holds a decent slice of Tribune Co.’s debt:

A lawyer for Oaktree did not return a call for comment, but sources said the hedge fund was not on board with the agreement and may seek support for overturning it during the plan confirmation process in bankruptcy court.

The Tribune says that Wilmington Trust, another creditor to the company, will probably also oppose the deal.