Reporting from Los Angeles and Chicago — Tribune Co.'s long-running sojourn in bankruptcy shows no sign of ending soon.
A federal judge said in a ruling Thursday that he wouldn't hold a hearing on plans to end the three-year bankruptcy until May at the earliest. Tribune had been hoping to resolve the case in the next few months.
Even if U.S. Bankruptcy Judge Kevin J. Carey keeps to his deadline, it will probably take months more for the media conglomerate to emerge from bankruptcy and obtain needed federal regulatory approvals for the transfer of broadcasting and other licenses to new owners.
Tribune is the parent company of the Los Angeles Times, the Chicago Tribune and other newspaper, television and media properties.
The case pits Tribune and it senior creditors, including Oaktree Capital Management in Los Angeles and JPMorgan Chase & Co. in New York, against a group of junior bondholders led by hedge fund Aurelius Capital Management in New York.
The two sides have battled furiously over their competing plans to reorganize the company.
Carey directed the adversaries to try to reach an agreement on scheduling matters "with a view toward a confirmation hearing to be held in mid- to late-May 2012."
The case could end "very quickly" if the two sides resolve their differences, "but the track record of this case suggests that won't happen," said Douglas Baird, a law professor at the University of Chicago.
Tribune and Aurelius declined to comment.
In his order, Carey reversed part of a ruling he made in October that seemed to give an advantage to a deeply subordinated class of note holders known as the Phones.
At the time, Carey indicated that the Phones class should be able to recover at least part of a claim with a face value of $1.2 billion, getting its share from money that would otherwise go to Aurelius and other junior creditors.
That opened the door to a parallel demand from Tribune Chairman Sam Zell, whose affiliate owns a similar note. It was Zell who acquired the company in a highly leveraged buyout in December 2007, a deal that landed it in bankruptcy a year later.
On Thursday, Carey reversed himself, saying that the Phones class was not on a par with Aurelius and other junior creditors for purposes of recovering bankruptcy assets.