Chicago Tribune Newspaper $13bn record bankruptcy

CHICAGO (MarketWatch) -- Tribune Co. said Monday that it filed for Chapter 11 bankruptcy protection to restructure its nearly $13 billion debt load, a move that dramatically underscores the dire circumstances clouding the near-term future of the newspaper industry.
The owner of the Chicago Tribune, founded in 1847, said that its operations would continue during the restructuring, allowing it to keep running its newspapers, television stations and interactive properties, and that it currently has enough cash to fund them.
The Chicago Cubs franchise, including Wrigley Field, is not included in the Chapter 11 filing, Tribune added. The company will continue to look for ways to "monetize the Cubs and its related assets."
Real-estate investor Sam Zell, who acquired Tribune last December, commented that "factors beyond our control have created a perfect storm -- a precipitous decline in revenue and a tough economy coupled with a credit crisis that makes it extremely difficult to support our debt."
The financing of Zell's $8.2 billion transaction involved the creation of an employee stock program that incurred a significant amount of debt.
Prior to Monday's filing, there had been concerns that the company might not be able to come up with more than $1 billion in interest payments due in 2008, and could default on a payment of more than $500 million due by June.