Bondholders of newspaper and television station owner Tribune Co. are asking a bankruptcy court judge to allow them to scrutinize the company’s 2007 sale to real estate mogul Sam Zell. The bondholders say the deal loaded the company with debt and caused it to file for Chapter 11.
In a filing late Wednesday in Delaware court, bondholders say the ”fraudulent” deal imposed an ”unsustainable debt burden” on an already declining business. They say the banks which arranged Zell’s leveraged buyout ”now concede that the transaction was a ‘mistake’.”
The bondholders aim to halt Tribune’s exit from Chapter 11 protection under a plan they say will give ”all but a sliver” of the publisher to the very banks they claim caused its demise.
Chicago-based Tribune owns the Los Angeles Times, Chicago Tribune and 23 TV stations.