Tribune Bankruptcy Nets Lawyers $233M

The lawyers working on the Tribune bankruptcy case have been paid $233.3 million by Tribune Co. and other players over the course of the tortuous legal proceedings, which began in December 2008, according to records filed with the U.S. Bankruptcy Court in Wilmington, DE, first reported by Bloomberg.

The largest sums have gone to two law firms: Sidney Austin LLP, Tribune’s main legal representation, has received $68.9 million, while Chadbourne & Parke LLP, representing unsecured creditors, has received $42.2 million. Alvarez & Marsal LLC, which is acting as a financial adviser to Tribune, has been paid $18.1 million to date.

Tribune will probably end up on the hook for legal fees incurred by committees of creditors, meaning most of the $233.3 million will be paid by the company itself. This is a substantial figure, considering that Tribune’s total revenues came to $3.18 billion in 2010, the last year for which numbers are available, and the company remains saddled with about $13 billion of debt, including $8 billion from the disastrous buyout engineered by Sam Zell in 2007.



The latest version of the much-contested Tribune bankruptcy reorganization plan is due for a hearing in Delaware bankruptcy court in May. This is a step forward, following a step back in November, when judge Kevin Carey rejected two rival bankruptcy plans presented by the company’s management and a dissident group of noteholders, deeming neither “confirmable.”

In an internal memo to employees publicized in January, Tribune’s chief restructuring officer Don Liebentritt held out modest hope that the bankruptcy might be resolved sometime in 2012. “While it is tough to predict an exact timetable for Tribune's emergence from Chapter 11, it is certainly possible that we could emerge late in the third quarter of this year," he said.

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