US judge rejects competing reorganisation plans for Tribune Co
01 Nov 2011
A US judge has rejected competing reorganisation plans for Tribune Co, which has threatened to put the biggest US media company in bankruptcy under a trustee unless, the company improved its strategy for ending the case.
US bankruptcy judge Kevin J Carey in Wilmington, Delaware, drew a parallel to the situation from a fable about a fox and scorpion, which would need to cooperate to safely cross a river.
The two could not cooperate and die, reflecting "an inescapable facet of human character: the willingness to visit harm upon others, even at one's own peril," Carey said opening his 125-page legal decision yesterday.
Carey appeared to be more favourably disposed to one plan backed by JPMorgan Chase & Co when he approved the heart of that group's reorganisation plan, which was a settlement of the main potential lawsuit arising from the company's 2007 buyout.
The main point of difference between the two plans centered on whether they settled or pursued a lawsuit against lenders, which include JP Morgan that funded the $8.2 billion buyout.
While rejecting both plans, Carey listed technical legal issues in rejecting both plans, including how each side released some of the potential claims. According to Carey, the JPMorgan release provisions were too broad.