December 22, 2008 4:41 PM

Chadbourne & Parke, Kramer Levin Tapped By Tribune Creditors

Posted by Rachel Breitman

To say it's been a bad year for the banks so far would obviously be an understatement, as even the  sturdiest of Wall Street’s titans have been shaken by the subprime crisis. But the Tribune Company's December 8 Chapter 11 filing only added further insult to the industry, revealing $13 billion owed to the media conglomerate's creditors.

Ten days later -- amid more bad credit news that ranged from a continuing flood of bankruptcy filings to  the going woes of financially teetering law firms, Chadbourne & Parke has plucked a prime assignment from the rubble by being named counsel to the Tribune creditors' committee.

Lead counsel will be the firm's bankruptcy and restructuring practice chair Howard Seife, who will get help from Chadbourne partner David LeMay and counsel Douglas Deutsch. Having handled the creditors committee for the New York Daily News's 1991 bankruptcy, Seife has some experience with newspaper company insolvencies. More recently, the Chadbourne team has represented creditors in the Spiegel Inc. and Parmalat bankruptcies in 2003.

The creditors committee includes committee cochairs JPMorgan Chase & Co. and Warner Bros. Entertainment, Inc., together with Deutsche Bank Trust Company Americas, Merrill Lynch Capital Corp., the Pension Benefit Guaranty Corp.,William Niese,  Vertis, Inc. and the Washington-Baltimore Newspaper Guild Local 32035.

“Like all committee counsel, our job will be to work towards a value maximizing transaction for all unsecured creditors," LeMay tells The Am Law Daily. "It's too early to say, but it is plain that the company needs some financial restructuring.”

Previously, more than 25 lenders representing close to 40 percent of Tribune’s bank debt had tapped Kramer Levin Naftalis & Frankel as counsel in the Chicago-based company's restructuring. The team includes the cochairman of the firm's corporate restructuring and bankruptcy department Thomas Moers Mayer, with help from bankruptcy partners Kenneth Eckstein and Philip Bentley, and benefits partner Christine Lutgens. Kramer Levin has in the past represented a number of the individual creditors in other bankruptcies.

Both teams of lawyers expressed faith that they could make some headway for the creditors, noting that the company, which went private in December 2007 in a debt-laden transaction, could emerge from the restructuring better able to tackle the debt.

"Tribune has a lot of valuable properties and a high level of cash flow, and we expect a good recovery from the matter," Mayer told the Am Law Daily. While the company has been buffeted by a steep drop in ad revenue this year, it retains close to $8 billion in assets, including 25 TV stations and 12 newspapers. A rumored sale of the Chicago Cubs could also ease the creditors' burdens.

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