Pedestrians walk by Tribune Tower, headquarters of Tribune Co. The company,… (Scott Olson / Getty Images )
The judge in Tribune Co.'s long-running bankruptcy signaled that he will file an opinion by the end of this week confirming a restructuring plan and ending the Chicago media company's epic bankruptcy case.
At a hearing Wednesday, U.S. Bankruptcy Judge Kevin Carey said he had prepared a 50-page draft of an opinion and planned to file it by Friday, pending the resolution of two minor issues involving certain wording in the plan. Those issues were resolved at the hearing, leaving the judge free to meet that schedule.
FOR THE RECORD:
An earlier version of this article had a dateline of Wilmington, Del. The story was reported from Chicago and Washington, D.C.
Though Carey didn't say so specifically, he strongly hinted that he would rule in favor of a restructuring plan proposed by the company, the Official Committee of Unsecured Creditors and a trio of senior creditors: Oaktree Capital Management, Angelo, Gordon & Co. and JPMorgan Chase & Co.
A favorable decision would start the process of letting Tribune move forward on a crucial effort to win Federal Communications Commission approval to transfer its broadcast TV and radio station licenses to a new ownership group led by Oaktree and the other senior creditors.
The company's emergence from Bankruptcy Court is contingent upon winning FCC approval.
The transfers are complicated by Tribune's holdings of newspapers and broadcast stations in several markets, including Los Angeles, where the company owns the Los Angeles Times and KTLA-TV Channel 5. Tribune also owns the Chicago Tribune, WGN-TV and WGN radio, all based in Chicago.
Until now, Tribune has sidestepped restrictions on ownership of multiple media outlets in the same city by securing waivers to those rules. The ownership change requires the commission to reissue the waivers.
Tribune filed for new waivers in 2010, but the agency's 180-day clock to make a decision was stopped 74 days later because the bankruptcy case was dragging on with no end in sight.
Lawyers from Tribune and the senior creditor group have met with FCC officials in recent weeks to update them on the bankruptcy process. Tribune officials have said they are confident that the FCC will grant at least temporary waivers for the new owners and are hoping for a decision within 90 days of Carey's ruling. FCC officials declined to comment Wednesday.
Media cross-ownership has been a political flash point among groups concerned that newspapers and broadcast outlets are increasingly being concentrated in the hands of corporate giants.
Several public-interest and labor groups, including Free Press, the Teamsters and the United Church of Christ, filed petitions to deny the transfers when Tribune initially filed them in 2010. Free Press remains opposed.
"We think there is a problem with dual ownership of TV stations and cross-ownership of a TV station and newspaper in a single market," said Matt Wood, policy director of Free Press. "We're always concerned about having fewer voices in a market."
Tribune filed its Chapter 11 petition in December 2008, and the bankruptcy process has generated more than $400 million in attorney and other professional fees.
Eddy Hartenstein, Tribune's chief executive, has repeatedly testified in court that the case has forced the company to compete with one hand tied behind its back at a crucial time for the industry.
"We appreciate the favorable indication on confirmation given by the Judge Carey this morning and look forward to his formal opinion by Friday," said Don Liebentritt, Tribune's chief restructuring officer, in an email after the hearing.
"We continue to work with the FCC for approval of our license transfer applications and hope for a successful conclusion of that process as quickly as possible," he said.
Oneal reported from Chicago; Puzzanghera from Washington.