Tribune Company Files For Bankruptcy Protection
NEW YORK — Media conglomerate Tribune Co. filed for bankruptcy protection Monday, as the owner of the Chicago Tribune, the Los Angeles Times, the Chicago Cubs and other properties tries to deal with $13 billion in debt.
Advertising revenue declined severely this year because of the recession, putting pressure on the Chicago-based company. Most of its debt comes from the complex transaction in which the company was taken private, with employee ownership, by real estate mogul Sam Zell last year.
Although the next major principal payment on the debt, of $593 million, isn't due until June, analysts say Tribune has been in danger of missing lender-imposed financial targets at year's end. Those targets are based on the level of debt relative to cash flow and become harder to meet as revenue declines, even if the debt itself doesn't increase.
Monday's filing, made in bankruptcy court in Delaware, could give Tribune time to raise cash by selling off assets in a tight credit market. It also could put additional pressure on its lenders to ease their targets, possibly in exchange for higher interest rates, as many other newspaper companies already have done.
The company entered court protection with $13 billion in debt and $7.6 billion in assets
Advertising revenue declined severely this year because of the recession, putting pressure on the Chicago-based company. Most of its debt comes from the complex transaction in which the company was taken private, with employee ownership, by real estate mogul Sam Zell last year.
Although the next major principal payment on the debt, of $593 million, isn't due until June, analysts say Tribune has been in danger of missing lender-imposed financial targets at year's end. Those targets are based on the level of debt relative to cash flow and become harder to meet as revenue declines, even if the debt itself doesn't increase.
Monday's filing, made in bankruptcy court in Delaware, could give Tribune time to raise cash by selling off assets in a tight credit market. It also could put additional pressure on its lenders to ease their targets, possibly in exchange for higher interest rates, as many other newspaper companies already have done.
The company entered court protection with $13 billion in debt and $7.6 billion in assets
posted by Kangaroo Brisbane Australia at 2:53 PM
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