The Chicago-based company, owned by real estate magnate Sam Zell, is looking to restructure payments on $12 billion in debt.
A snippet from the LA Times story:
Tribune Co. directors approved the action to seek Chapter 11 protection in a meeting today, saying they want to restructure payments to banks and other creditors, following real estate magnate Sam Zell's purchase of the company last year.
The Chicago-based company had roughly $300 million cash on hand, more than enough to make a $70-million payment due today. But executives reportedly were unable to persuade lenders to undertake a broader restructuring of the debt.
Among other obligations, a $512-million principal payment related to Zell's leveraged buyout is due in June.
Zell calls it a "perfect storm" in a news release:
"Factors beyond our control have created a perfect storm -- a precipitous decline in revenue and a tough economy coupled with a credit crisis that makes it extremely difficult to support our debt."A memo from the big boss reportedly went out to staff this morning lamenting that they had to learn of the BK possibility on the news last night (those pesky reporters!), and reminded everyone that nothing about this should affect their work. Nothing to see here. Go about your business. Don't you worry one bit.
— TJ Sullivan in LA
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