Tribune Cleared to Exit Bankruptcy

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CHICAGO - DECEMBER 8:  Flags wave in the wind as the Tribune Co., publisher of the Chicago Tribune and Los Angeles Times, sought bankruptcy court protection from creditors outside the Chicago Tribune building December 8, 2008 in Chicago, Illinois. The 161-year-old newspaper and broadcast company was laboring under $12.9 billion in debt, according to today's Chapter 11 filing in U.S. Bankruptcy Court in Wilmington, Delaware.

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With new waivers granted for the Tribune Co.'s ownership of newspapers and TV stations in five markets and a new CEO waiting in the wings, the Chicago-based media company is finally cleared to emerge from Chapter 11.

As a result, observers expect the new company to focus on television and shed its newspapers -- including, perhaps, the Los Angeles Times for an estimated $400 million.

Two pieces of news emerged Friday; first, that senior creditors who'll run the company after its bankruptcy have selected industry veteran Peter Ligouri as their CEO. Ligouri is the former entertainment chief of Fox Broadcasting and COO at Discovery Communications, where he helped oversee OWN.

REPORT: Peter Ligouri Expected to Run Tribune Co.

And second, that federal regulators have extended waivers of its cross-ownership rules for Tribune's media properties in Los Angeles, Chicago, New York, South Florida and Hartford, Conn., to those new owners.

Tribune's new owners include Oaktree Capital Management, Angelo Gordon & Co. and JPMorgan Chase & Co. The company owns 23 television stations -- including WPIX in New York, WGN in Chicago and KTLA in Los Angeles -- and is the fourth-largest newspaper publisher in the U.S. as measured by daily circulation.

“We are extremely pleased with today’s action by the FCC,” outgoing Tribune CEO Eddy Hartenstein told the L.A. Times. “This decision will enable the company to continue moving forward toward emergence from Chapter 11, a process we expect to complete over the course of the next several weeks.”

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It's the end of a long and winding bankruptcy for Tribune, which -- with a debt load of $12.9 billion -- filed for Chapter 11 protection in December 2008. Chicago real estate entrepreneur Sam Zell incurred much of that when he took the company private in a leveraged buyout a year earlier.

The creditors' choice of Ligouri as CEO suggests that Tribune will focus on the television side of its business -- it's already a major buyer of syndicated content for its local stations. And last month, the Times reported that Rupert Murdoch is among those who have approached Tribune's creditors about buying the Southland's largest newspaper for an estimated $400 million. Other interested parties include Orange County Register owner Aaron Kushner and U-T San Diego owner and San Diego real estate developer Doug Manchester.