August 14, 2009

Zell may be forced out of Tribune Co.

Billionaire Sam Zell may be forced out of the Tribune Co., despite improvements in the Chicago media company's cash assets, sources close to the talks said.

In a recent financial report filed in federal bankruptcy court, the Tribune's cash on hand rose to $740.5 million, up from $702 million in late May, the Chicago Sun-Times reported Friday.

But creditors may be running out of patience with the management team that has leveraged the company $13 billion into debt, the newspaper said.

Creditors are owned $8.6 billion. Tribune Co., which owned the Chicago Tribune, The Los Angeles Times and 24 radio and television stations, filed for bankruptcy eight months ago.

The banks will be in charge, one of the sources said.

This week, the court gave Zell, a real estate magnate, until Nov. 30 to file a reorganization plan. Creditors must wait until then to file their own plan, the newspaper said.