Tribune Agrees to Cede Control to Big Debtholders

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Tribune Co. laid out its plans to cede control of the company to its lenders, as the newspaper-and-television company tries to end 16 months in bankruptcy court.

Tribune said Thursday it had agreed to settle a debtholder lawsuit that had held up its efforts to emerge from bankruptcy court. Tribune said the settlement was agreed to by lenders including J.P. Morgan Chase & Co. and investment firms Angelo Gordon & Co. and Centerbridge Partners LP.

The settlement signals that the creditors have agreed to wipe out much of Tribune's roughly $13 billion in debt. In return, under Tribune's plan, the lenders would own the media company, whose holdings include the Chicago Tribune, the Los Angeles Times and the Orlando Sentinel, as well as a string of local-television stations.

Tribune said it expects its biggest debtholders, led by J.P. Morgan and Angelo Gordon, to receive cash, new debt and stock representing more than 91% of the equity in a reorganized company. Other lenders will receive small percentages.

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