Tribune Co. Building Its Case to Stay Intact

Corporate structure may need to be altered to reach workable plan

A month into its Chapter 11 bankruptcy case, Chicago-based Tribune Co. is beginning to form a strategy for holding the company's major assets together, not tearing them apart, sources close to the situation said.

But shaping up to be a central challenge is how to restructure the media conglomerate's $13 billion in debt while preserving its complex, tax-advantaged employee-ownership structure.

Though Tribune Co. executives remain in the early days of building a plan of reorganization, sources said Chairman Sam Zell's team is operating on the assumption that Tribune Co. assets like the Chicago Tribune, Los Angeles Times and WGN TV-9 are probably worth more held together than they would be chopped up and sold at distressed prices. An exception is the Chicago Cubs baseball team, which is in the late stages of being sold, with a winning bidder expected to be named as soon as this week.

Zell is also intent on preserving Tribune Co.'s S-Corp ESOP corporate structure, reasoning that its tax advantages will continue to have significant value if the company can emerge from bankruptcy protection as a going concern. [Click for MORE]

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