Tribune newspaper files for bankruptcy protection from creditors

December 8, 2008 by · Leave a Comment
Filed under: Stock Market News 

It will be likely to see more of these private equity deals fall apart and it up in bankruptcy as well. Sam Zell must not be happy about this turn of events. It is interesting that they talk about “de-leveraging” in this press release. Something tells me that this might not be a Recession but in reality a very real Depression. The stock market is sending mixed signals, with the amount of bad news coming out, it is surprising that the market is not only where it is at but actually gaining. Maybe some of these liquidity is seeping into the stock market?

News:

The publisher of the Chicago Tribune and the Los Angeles Times declared bankruptcy on Monday as the U.S. newspaper industry’s unrelenting loss of readers and advertisers claimed its biggest victim yet.

Tribune Co, which owns eight major daily newspapers and several television stations, filed for Chapter 11 bankruptcy protection after collapsing under a heavy debt load just a year after real estate mogul Sam Zell took it private.

Like other big U.S. newspapers, Tribune is under pressure from declining advertising revenue and circulation as more people get news online and as companies cut their marketing budgets because of the economy.

“The Tribune Co’s financial condition is symptomatic of the ills that plague the newspaper industry,” said Jerome Reisman, a bankruptcy attorney with Reisman, Pierez & Reisman.

Tribune’s bankruptcy filing is the latest chapter in the unraveling of the leveraged buyout boom which saw many companies bought by private equity firms and other investors ending up with massive debt loads.

Zell loaded up the privately held publisher with about $8 billion in additional debt when he took the company private in a transaction largely financed by company contributions to an employee stock option plan.

Source: Reuters

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