tribune company

Tribune Co. emerged from Chapter 11 bankruptcy after the second largest newspaper publisher in the United States applied for court protection four years ago. The $8.2 billion leveraged buy-out by Sam Zell weighed in. The company accumulated $12.9 billion total debt while its revenue from advertising was declining.

The new owners of the Tribune Co include Oak Tree Capital Management, Angelo Gordon and Co., and JPMorgan Chase & Co. (NYSE:JPM). The investment firms acquired ownership of the company after assuming its debt.

Tribune Co has a new board of directors including Bruce Karsh, Ken Liang, Peter Murphy, Ross Levinsohn, Craig A. Jacobson, Peter Liguori, and Eddy Hartenstein. A majority of the members of the board are veterans from the entertainment industry.

The newly reorganized Tribune Co. has a reduced amount of debt after closing a $1.1 billion secured term loan and $300 million credit line. The company will use the loan to fund its payments under its reorganization plan, and its credit line will fund its ongoing business operation.

In his letter to employees, Tribune CEO Eddy Harstein said, “Tribune is far stronger than it was when we began the Chapter 11 process four years ago and, given the budget planning we’ve done, the company is well-positioned for success in 2013.”

In addition, Harstein said, “Tribune emerges from the bankruptcy process as a multimedia company with a great mix of profitable assets, strong brands in major markets and a much-improved capital structure.”

According to the report from the Los Angeles Times, Liquori, a former executive of News Corp (NASDAQ:NWSA) (NASDAQ:NWS) is expected to replace Harstein as CEO of the company in the next few weeks.

Tribune Co will issue approximately 100 million shares of class A and B stock to former creditors and warrants to buy the shares. The class B shareholders have limited voting rights. They are not allowed to vote for directors.

According to some analysts, there is a possibility that Tribune Co would sell some of its slow-growing newspapers to focus on its TV holdings. The media company owns the Los Angeles Times, The Baltimore Sun, the Chicago Tribune, WGN in Chicago and 22 other TV stations as well as WGN radio stations.