An independent examiner investigating claims of “fraudulent conveyance” in the Tribune Co. bankruptcy case last week asked for a 15-day extension for filing his report. The extension is expected to delay the bankruptcy confirmation hearing for the Tribune’s reorganization plan which is schedule for the week of August 16th. The Tribune bankruptcy, which is now in its 19th month, has suffered from a series of delays and challenges that have many wondering about the future of the company. Tribune Co. Chairman Sam Zell has said that he believes that the company’s bankruptcy process has become stalled because many potential investors are uncertain about the general health of the media industry in general.
“There’s a lot of different players, some of them being original investors, a lot of them having bought the debt when it was extremely cheap, and there’s a lot of questions because the severity of the downturn in the media business in the beginning of ’08 kind of changed the calculus,” Zell said during an appearance on CNBC.
“It raises the whole question to any potential investor as to what’s the future and how is the media — and particularly the newspaper side of the business — going to change in the future,” he said.
But Zell has faith that they will eventually muddle through the bankruptcy process safely, if they take clues from the past and adapt to the present realities they are facing.
“All bankruptcy scenarios are difficult,” Zell said. “All of them involve lots of different parties with lots of different positions and lots of different views. And the whole bankruptcy process is a kind of melting pot where you throw it all in the middle and stir it up until you find whatever kind of sauce works. We’re in the process of attempting to find that sauce.”
Zell’s explanation of bankruptcy may simplify things a bit much; however it is true that bankruptcy, especially Chapter 11 bankruptcy requires that debtors and creditors work together to come up with solutions that allow the creditor to be repaid a fair amount will maintaining enough of the debtor’s assets so that they can survive and thrive after exiting bankruptcy.