U.S. Trustee appoints examiner to probe Tribune’s LBO

May 3 (BestGrowthStock) – A U.S. Trustee has appointed an examiner
to investigate whether the 2007 leveraged buyout (LBO) of
Tribune Co (TRBCQ.PK: ) led by real estate developer Sam Zell
left the media company insolvent.

The examiner, Kenneth Klee, is an attorney at Los
Angeles-based lawfirm Klee, Tuchin, Bogdanoff & Stern LLP. He
also teaches bankruptcy law at the University of California at
Los Angeles.

In April, Tribune and its creditors agreed to appoint an
examiner to determine if Tribune’s management, board of
directors, lenders and advisors were liable.

Bondholders have blasted the deal as “virtually no money
down LBO” and blamed the deal for Tribune’s bankruptcy and
their investment losses.

The junior bondholders, who hold $1.2 billion of debt, have
said their best hope of a recovery from the bankruptcy lies in
disallowing billions of dollars of senior claims.

They are seeking to prove the senior lenders extended loans
to finance the leveraged buyout, knowing it would render the
company insolvent.

The senior lenders will receive nearly all of the company’s
equity under the proposed reorganization plan, which will wipe
out billions of dollars in debt.

The case is In re: Tribune Co et al, U.S. Bankruptcy Court,
District of Delaware, No. 08-13141.

Investment Research

(Reporting by Santosh Nadgir in Bangalore; Edited by Roshni
Menon)

U.S. Trustee appoints examiner to probe Tribune’s LBO