After more than two years of backroom negotiations, the Tribune Company bankruptcy case finally got underway in court yesterday. Bankruptcy judge Kevin Carey is now faced with choosing between two rival plans. One, backed by the Tribune Company, would essentially shift the company’s debt, and assets, into the hands of lenders like JPMorgan Chase. The other, backed by Aurelius Capital Management, would take a more aggressive stance toward getting funds from those who pushed Tribune Company‘s leveraged buyout–namely Sam Zell. (Zell isn’t a fan of either plan, apparently, because both leave the option open to sue him and his company Equity Group Investments.)
However, during yesterday’s opening statements, Carey let everyone know that after two years of negotiations, he still retained the option to reject both plans.
“What then?” he asked rhetorically, not allowing either side a response.
Lawyers working on the case have apparently begun referring to it as “water torture.” Which seems to suggest there’s no end in immediate sight. The fate of Tribune‘s media properties, including the LA Times, are still very much in the air for the foreseeable future.