Tribune bankruptcy ruling could benefit Sam Zell
Michael Oneal reports Judge Kevin J. Carey surprised everyone in the Tribune bankruptcy case when he said in his Oct. 31 opinion that holders of a deeply subordinated class of notes known as PHONES were being treated unfairly and should be able to recover at least a slice of a claim with an original value of more than $1 billion. Sources tell Oneal that the judge's PHONES ruling provides an opening for Zell's lawyers to argue that he, too, should be eligible to collect a partial return -- one that could run into the tens of millions of dollars. Oneal writes:
The emergence of Zell as a potential in-the-money creditor is likely to stir controversy, as he's become the target of legal charges related to claims that the Tribune buyout was a fraudulent conveyance, meaning it left the company insolvent from the start.