Sam Zell Could Be In Line for Tribune Co. Bankruptcy Cash

With all the powerful interests elbowing over every dollar in the Tribune Company bankruptcy case, the one guy we were sure wasn’t going to get a dime back was Sam Zell–given that his leveraged buyout of Tribune is almost universally acknowledged to be the cause of the company’s collapse. I mean, is there a single human being out there, other than Zell, who believes the real estate magnate is entitled to anything?

Well, apparently there is–and that human being is bankruptcy judge Kevin Carey.

From the Chicago Tribune:

In a long-awaited opinion delivered Oct. 31, Carey surprised everyone involved in the case by saying that holders of a deeply subordinated class of notes known as PHONES were being treated unfairly and should be able to recover at least a slice of a claim with an original value of more than $1 billion.

Carey didn’t mention Zell’s $225 million claim, which stems from his failed 2007 leveraged buyout of Tribune Co., but sources said the judge’s logic regarding PHONES provides an opening for Zell’s lawyers to argue that he, too, should be eligible to collect a partial return because the two securities share similar legal language.

Sources close to the situation said PHONES holders may now claim that they should be able to recover as much as $130 million, in addition to participating in a potentially lucrative litigation trust that will be part of the plan of reorganization.

Of that $130 mil, Zell could potentially recover tens of millions. The Tribune assures us Zell would likely use that money to leverage a settlement in the numerous lawsuits he’s currently facing over his aforementioned buyout.

We rest assured.

H/T Romenesko