Tribune Co.'s recent bankruptcy exit plan has been harshly criticised by creditors such as Oaktree Capital Management, Goldman Sachs Loan Partners and Marathon Asset Management, who said that it was "impossibly tainted by the Debtors' attempt to give a free pass to their insiders. And it is not a settlement that has the approval or agreement of the lion's share of the entities being asked to fund it," Variety reported today.

The reorganisation plan permits Tribune Co., which belongs to Sam Zell (left), to keep its newspapers and broadcast stations as it eases the group's Chapter 11 bankruptcy, reported the Boston Globe. If the plan receives approval then Tribune Co. will hand over ownership to lenders JPMorgan Chase & Co and Angelo, Gordon & Co.

The afore-mentioned creditors would be releasing more than US$400 million in value to bondholders and other unsecured creditors. Under the plan, Tribune Co.'s board would be "released for free, without any payment or consideration, accompanied by unlimited indemnities from the reorganized enterprise," the Variety article stated. According to the Globe, these creditors require to be paid $3.6 billion.

Meanwhile, junior bondholders backed by the Wilmington Trust Co. said that JPMorgan Chase, Bank of America and other institutions that offered finances to the buyout were committing fraud, since they were aware that Tribune Co. would be broke. These bondholders may lose the $1.2 billion they own in stocks, the Globe article suggested.

Wall Street Journal reported that senior leaders JP Morgan and Angelo, Gordon & Co., as well as Tribune Co.'s biggest shareholder Centerbridge Partners LP, were on board for the reorganisation incentive. The Globe added that Centerbridge, which has 37 percent of the group's remaining senior bond debt, would be attaining a 7.4 percent stake.

Tribune Co. owns the Chicago Tribune and the Los Angeles Times, among other media across the United States. For more on the plan, visit our previous coverage on the issue.