• by Erik Sass  @eriksass1, October 19, 2010

In the most recent Tribune Co. development, the bankrupt company's management appears to be under siege by its own board of directors. Late Tuesday night, the Chicago Tribune reported that Tribune CEO Randy Michaels would resign by the end of the week, reversing his vow earlier in the day to stay on, despite pressure from the company's board of directors.

Michaels is viewed as an impediment to reaching a deal with creditors. He's also associated with Tribune's chief innovation officer Lee Abrams, who resigned amid a wave of criticism for sending a controversial, off-color email to the entire company. Michaels has his own history of inappropriate conduct; he allegedly offered a waitress $100 to take off her shirt.

The turmoil among Tribune's top ranks also comes just a few weeks after a scathing article by The New York Times' media columnist David Carr, in which Tribune employees complained about the "frat house" antics of the senior management team, assembled by Sam Zell following his ill-fated takeover in October 2007.

The NYT article and Abrams' ill-timed email have provided even more ammunition to disgruntled creditors, who are battling the bankrupt company's management, and each other, for a larger share of the bankruptcy payout.

In mid-September, one unsecured bondholder, Aurelius Capital Management, demanded that Tribune's entire management be replaced by a court-appointed trustee, alleging that the current management had behaved "dishonestly and fraudulently."

Although Tribune said it reached a deal with most of its creditors last week, Aurelius continues to oppose certain key aspects of the current bankruptcy reorganization. It is determined to press its demand that Tribune's management be replaced at a bankruptcy court hearing scheduled for this Friday.

In an email defending himself against various criticisms, Abrams argued that the timing of the moves against Tribune's management is no coincidence: "I suspect that a major component of this debacle is being motivated by a power play to seize creative, cultural and business control of the company as it emerges from Chapter 11."