Tribune prepares for possible bankruptcy filing: report
Monday, December 8, 2008; 6:20 AM
NEW YORK (Reuters) - Publisher and broadcaster Tribune Co. is preparing for a possible bankruptcy-protection filing as soon as this week, The Wall Street Journal reported on its website on Sunday, citing people familiar with the matter.
Tribune, the privately held publisher of the Chicago Tribune and Los Angeles Times, in recent days has hired Lazard Ltd. as its financial adviser and a legal counsel for a possible trip through bankruptcy court, the paper reported, citing people familiar with the matter.
The New York Times reported that Tribune hired advisors including Lazard and Sidley Austin, one of its longtime law firms.
Messages left with Tribune and Sidley Austin were not immediately returned. Lazard declined comment.
The Wall Street Journal said Tribune has been on wobbly footing since last December, when real-estate mogul Sam Zell led a debt-backed deal to take the company private.
It said that the company's cash flow may not be enough to cover nearly $1 billion in interest payments due this year, and Tribune owes a $512 million debt payment in June.
One of Tribune's most pressing concerns is that the company is likely to be in violation of debt terms that limit borrowings at the end of the year to nine times its adjusted profits, the paper said.
The paper said that a restructuring outside of bankruptcy court remains an option for Tribune. It said executives have indicated that its talks with lenders are amicable, and it remains possible the two sides can agree to rework the company's borrowings on their own.
Tribune in November reported a third-quarter loss from continuing operations of $124 million, compared with a profit of $84 million in the same quarter a year ago.
Revenue fell 10 percent to $1 billion.
Tribune, which took on about $13 billion of debt when it went private last year under a deal led by Zell, is trying to sell off properties such as the Chicago Cubs baseball team to pay off its debt. It already sold the Newsday newspaper on Long Island, New York, to Cablevision Systems Corp.
(Reporting by Megan Davies; Editing by Leslie Adler & Kim Coghill)
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