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Law360 Guest Article: Case Study - In Re Tribune Co.
11/04/2011
Lenard M. Parkins

Law360, New York (November 04, 2011, 4:43 PM ET) -- Halloween provided frights for debtors and a victory for creditors when Judge Kevin Carey issued his opinion in the Tribune Company bankruptcy cases in Delaware. Judge Carey denied confirmation of competing plans of reorganization and provided creditors with an arrow for their quivers when opposing confirmation of a “joint plan” in jointly administered cases.[1]

Judge Carey’s lengthy opinion included a section on 11 U.S.C. § 1129(a)(10) where he held that neither plan satisfied this confirmation requirement. The section provides, “If a class of claims is impaired under the plan, at least one class of claims that is impaired under the plan has accepted the plan, determined without including any acceptance of the plan by any insider.” In counting votes for the joint plans, two of 111 debtors under one joint plan had an accepting impaired class while the other joint plan had accepting impaired classes in all but 39 of 111 debtors.

The issue, stated succinctly, is whether 1129(a)(10) is evaluated on a “per debtor” basis or on a “per plan” basis. If the latter theory prevailed, the acceptance by three of 256 classes of claims against two of 111 debtors could be support confirming the plan over the rejection of the overwhelming majority of creditors. Judge Carey held that 1129(a)(10) is determined on a “per debtor” basis.

Excerpt from Law360, Nov. 4, 2011. To view the full article, click the PDF linked below.

PDF - Case Study: In Re Tribune Co.

[1] Opinion on Confirmation, In re Tribune Company, et. al, jointly administered cases under Case No. Case No. 08-13141 (KJC), U.S. Bankruptcy Court, District of Delaware, entered Oct. 31, 2011 (the “Opinion”), http://www.deb.uscourts.gov/Opinions/2011/kjc201101031-tribune.pdf.

[2] Substantive consolidation has the effect of eliminating separate entities and placing all assets and liabilities into a common pool. Joint administration does not affect the substantive rights of any party.

[3] See “Charter: The Most Important Recent Bankruptcy Decision for Secured Creditors”, 27 Emory Bankruptcy Developments Journal, p. 9, Michael Chaisanguanthum.