Oaktree, Angelo Gordon to take over Zell's Tribune

The Chicago-based media company that went sour in December 2008 under a $13bn debt load has agreed to a reorganisation plan with Oaktree Capital and Angelo Gordon.

Tribune Company, the publisher of the Chicago Tribune and the Los Angeles Times, has agreed to a reorganisation plan with Oaktree Capital and Angelo Gordon to emerge from bankruptcy.

The Chicago-based media company acquired by billionaire real estate investor Sam Zell in December 2007 filed for bankruptcy in December 2008 under a $13 billion debt load. At the time, Tribune had just $7.6 billion of assets. It had been working with lenders including JPMorgan, Deutsche Bank and KKR Financial to restructure its debt.

The current settlement comes as a result of a court-ordered mediation request made by the Tribune and overseen by US bankruptcy court judge Kevin Gross. “[The reorganisation] enables the company to exit Chapter 11 and distributes the equity of the reorganized Tribune and its subsidiaries to the holders of the Initial and Incremental Term Loan claims,” chief restructuring officer of the Tribune Don Liebentritt said in a statement.

Oaktree and Angelo Gordon both hold “significant amounts” of the initial and incremental term loan of the company.

Zell invested $315 million in the Tribune in 2007 as part of a $8 billion leveraged buyout. Under the terms of the transaction, Tribune agreed to sell the US baseball team the Chicago Cubs.

Zell later admitted he’d been too optimistic about the media company, and that the $8 billion LBO was a “mistake”.