When Sam Zell took control of the Tribune Co two years ago it was hoped that he could revive the company and bail out their creditors who are owed billions of dollars and now after filing Chapter 11 protection Tribune’s creditors have made a final pitch to the company.

Under the plan a judge must decided if the billions of dollars in owned money should be paid back by the company through lawsuits or if bankruptcy is the best option based on all available circumstances.

The case, which has been stuck in court since December 2008 is the longest contentious suit in recent years and has dragged on as investors try to stop the company from claiming bankruptcy.

When Sam Zell took over the company the organization was carrying $13 billion in debt and the buyout has been deamed the “deal from hell” and that deal has led Zell’s creditors to use closing arguments to show that the brokerage of the takeover was flawed and that $1 billion in losses should be repaid because of the purchase.

Tribune representative James Conlan told Reuters:

“A consensual resolution would be optimal,” while adding that absent that agreement the company’s proposal “is the next best choice to provide a path to exit bankruptcy, and a fair one.”

Tribune company is offering to pay $480 million to noteholders, approximately 25% of the $2 billion they had invested should Chapter 11 be granted. Under the agreement investors would not be able to sue the company for further payments.

Also under the agreement, shareholders who include JPMorgan Chase & Co and Angelo Gordon & Co would own controlling interests in Tribune CO, a company worth approximately 70% of the $8.7 billion they are currently owed.

Tribune Creditors Make Final Bankruptcy Plan Pitches is a post from: The Inquisitr

Partners,

We just announced that Tribune is restructuring its debt under Chapter 11 protection. I’m sure you saw the speculative coverage last night and this morning. I would have preferred everyone get the news from me first, but since our debt is publicly traded, we had to keep this decision confidential until we had a formal board decision. The Cubs franchise is not part of the filing.

Most importantly, I want to stress that we will continue to operate our business as usual. That includes meeting payroll and covering benefits (such as healthcare, disability and others), and paying vendors for all goods and services they provide to us going forward.

As is routine with Chapter 11 filings, we have filed “First-Day Motions” to get court approval on these and many other programs that are essential to continuing our businesses without disruption. We expect to get approval on these motions within the next few days.

You are also most likely wondering about the other aspects of your compensation. The 401(k) is unaffected by the filing, and in general, the existing benefits in the pension and cash balance plans are also unaffected by the filing. The ESOP is part of the ownership structure, so its value and role long-term will be determined in the restructuring. We believe the structure is a valuable asset to the company and that there are strong reasons to preserve it.

So, how did we get here? It has been, to say the least, the perfect storm. A precipitous decline in revenue and a tough economy have coupled with a credit crisis, making it extremely difficult to support our debt. All of our major advertising categories have been dramatically impacted.

By restructuring our debt, we will reduce the pressure on the company’s operating businesses, enabling us to pursue our vision of creating a sustainable, cutting-edge media company that is valued by our readers, viewers, and advertisers, and that plays a vital role in the communities we serve.

This filing should not impact the way you do your jobs on a day-to-day basis. We will continue to operate responsibly in a challenging environment — aggressively managing costs and maximizing revenue opportunities. These are all things we would do whether or not we were restructuring our debt.

Our challenges are consistent with those facing all media companies, and an increasing number of companies across a variety of industries today. The reality is that we — along with the rest of the country — have very little visibility on where the economy is headed and how our businesses will perform given the recession.

The good news is that we have great brands, and we produce great products every day. It’s up to all of us to continue to focus on what it is we do best.

As your Chairman and CEO, I will continue to be actively engaged in the business and I remain committed to the company, to you and to our lenders. Randy, Gerry and the rest of the management team are equally dedicated to moving this company forward.

I’m sure you have a lot of questions that this email doesn’t cover. I encourage you to visit TribLink where we’ve posted some anticipated Q&A, or call the toll-free number we’ve established — 888-287-7568. We’ll also have information posted on Tribune.com. But, recognize that there is quite a bit we don’t know — or that we cannot confirm — at this point.

I am proud of the work we have done at Tribune in the last year. I’ve seen strong determination to take hold of this company and put it on a new course. As a result, we’ve reduced costs, gained market share, and laid the groundwork for creating a new business model out of traditional media. This restructuring will give us the time we need to build that model, to secure sustainable and growing cash flow, and to achieve the success the talented partners in this company deserve.

Sam

• Tribune Bankruptcy: The Complete Story

Tribune Company’s Bankruptcy Memo From CEO Sam Zell is a post from: The Inquisitr

All Tribune properties will continue operating normally during the process, the company says. The Chicago Cubs franchise and Wrigley Field, also owned by Tribune, will not be affected. Tribune has been looking to sell the Cubs franchise since last December.

[Tribune Company’s Bankruptcy Memo From CEO Sam Zell]

The main purpose of the Tribune bankruptcy filing is to deal with the company’s $13 billion debt, executives say. Tribune just went private about one year ago under a deal led by real estate mogul Sam Zell. Much of its debt is attributed to that shift.

Tribune’s Chapter 11 bankruptcy filing says the company has $7.6 billion in assets and $12.79 billion in liabilities.

Tribune, like many other media ownership companies, has been making cutbacks all year. The Chicago Tribune newspaper announced a fresh round of layoffs just this week, which follow the elimination of 80 jobs a few months ago. Tribune executed a nationwide 2 percent cutback of its workforce in February.

Overall, Tribune employs about 20,000 people, according to its Web site. The company says 74 percent of its revenue comes from publishing and interactive properties, while 26 percent comes from broadcasting and entertainment ventures.

A full list of the Tribune Company’s properties can be found here.

Tribune’s bankruptcy filing had been rumored for some time now. The company reported a $124 million loss for the third quarter of 2008.

• Read Sam Zell’s Letter to Employees

Tribune Bankruptcy: Company Files Chapter 11 is a post from: The Inquisitr