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Judge expects to rule in early July on Tribune bankruptcy

The Chicago Tribune 435 N. MIchigan Avenue is photographed Friday June 8 2012. | Richard A. Chapman~Sun-Times

The Chicago Tribune at 435 N. MIchigan Avenue is photographed on Friday, June 8, 2012. | Richard A. Chapman~Sun-Times

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Updated: July 10, 2012 6:06AM

The judge handling the Tribune Co. bankruptcy case said Friday he expects to issue a written opinion in early July.

Receipt of the opinion from U.S. Bankruptcy Judge Kevin Carey approving a plan to reorganize the Chicago-based media firm would allow Tribune to move to its next step toward bankruptcy emergence: getting federal approval to transfer ownership of broadcast licenses.

Carey mentioned his plan to write an opinion — and not to immediately issue a ruling — at a hearing Friday in Wilmingon, Del. He has presided over the 3½-year case, which has been made complex by warring groups of debt holders.

The legal wrangling has been expensive, costing Tribune at least $243 million since it declared bankruptcy in December 2008. But most of the business before Carey has been settled, and rules have been laid down for an aggrieved group of bondholders led by Aurelius Capital Management to pursue claims in other courts.

Sparring parties in the case settled several matters before Carey in hearings Thursday and Friday, and the judge scheduled a short session for Monday to handle what an attorney called “minor open issues.”

Carey did not voice his feelings from the bench, but he is expected to approve a Tribune-sponsored reorganization plan that hands control of the company to senior lenders, including JPMorgan Chase & Co., Oaktree Capital Management LP and Angelo, Gordon & Co.

But their control can be official only if Tribune gets permission from the Federal Communications Commission to transfer its broadcast licenses to new owners.

Tribune owns the Chicago Tribune, Los Angeles Times, the Sun of Baltimore and other major newspapers. But its big profit center is 24 television stations in cities throughout the U.S., including Chicago’s WGN.

Many analysts believe the new owners will break up the company, perhaps selling the papers, which are operating on losses or on thin profits, to local investors.

Tribune went into bankruptcy a year after Chicago real estate tycoon Sam Zell bought it for $8.2 billion. Zell overloaded the company with debt while revenues were falling amid a historic shift in advertising away from traditional media.

Aurelius, in line for an estimated $431 million settlement or about a third of its claims, has the option of pursuing more money in suits against Zell and former Tribune shareholders.

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