Faced with a mountain of debt and shrinking advertising revenue, the Chicago-based Tribune Co., which owns the Los Angeles Times, filed for Chapter 11 bankruptcy protection on Monday.
The company made the move as a way to restructure payments due to banks and other creditors following the sale of the company to real estate magnate Sam Zell last year, sources said.
Tribune's Board of Directors has approved the action filed in federal court in Delaware, the Los Angeles Times said.
According to the paper, the Tribune Co. had about 300 million U. S. dollars in cash on hand, enough to make a 70 million dollars payment due Monday. But Tribune executives were unable to strike a deal with lenders to restructure the rest of the company's debt.
A 512-million-dollar payment, related to Zell's highly leveraged buyout, is due in June. Tribune is reportedly counting on selling the Chicago Cubs and Wrigley Field to cover that bill. The projected value of the Cubs and Wrigley Field is estimated at around 1 billion dollars.
Advertising revenue for Tribune's eight daily newspapers and 23 television stations, which include KSWB-TV in San Diego, has fallen sharply over the past year and is expected to keep falling in 2009, the newspaper reported. - PNA/Xinhua
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