DealBook: Tribune May Face Potential Bankruptcy Filing

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Edited by Andrew Ross Sorkin

TODAY'S TOP HEADLINES | Monday, December 8, 2008 M & A: The Miami Herald Is Said to Be for Sale BANKING: Banks Need to Broaden View of Risk, Fed Official Says PRIVATE EQUITY: In Private Equity, the Limits of Apollo's Power HEDGE FUNDS: A Bumper Year for Jim Chanos OFFERINGS: European and Asian Markets Rise Sharply VENTURE CAPITAL: Blackstone Leads Funding for Coskata LEGAL: Detroit Bailout Is to Bring On U.S. Oversight TOP STORY Tribune May Face Potential Bankruptcy Filing The Tribune Company, the newspaper chain that owns The Chicago Tribune and The Los Angeles Times, is trying to negotiate new terms with its creditors and has hired advisers for a possible bankruptcy filing, The New York Times reported, citing people briefed on the matter. Tribune is in danger of falling below the cash flow required under its agreement with its bondholders, but it is not clear how seriously Tribune is thinking about seeking bankruptcy protection. Analysts and bankruptcy experts say that the hiring of advisers, including Lazard and Sidley Austin, one of the company's longtime law firms, could be a just-in-case move, or a bargaining tactic. Tribune went private last December, paying more than $8 billion in a deal that put Samuel Zell, a real estate billionaire, in control of the company. It has struggled since then under the resulting debt, forcing deep cuts at its newspapers. It also sold Newsday to raise cash. Go to Article from The New York Times» Go to Item from DealBook» Read More Add a comment ADVERTISEMENT Back to Top MERGERS & ACQUISITIONS McClatchy, burdened by debt and a steep slide in newspaper advertising, wants to sell one of its most-prized properties, The Miami Herald, The New York Times reported, citing people briefed on the company's plans. Go to Article from The New York Times» Read More Add a comment Deutsche Borse rebuffed rumors that it might join with NYSE Euronext to create the world's leading stock exchange, issuing a statement Sunday flatly declaring it had nothing to report. Go to Article from The Associated Press via The New York Times» Go to Article from Der Spiegel» Read More Add a comment Merrill Lynch's and Bank of America's shareholders voted in favor of merging their two companies Friday. Merrill's chairman, John Thain, was the firm's only board member to attend the vote, Bloomberg News said. Meanwhile, speculation is rife about how many layoffs will follow the merger. Go to Article from Bloomberg News» Go to News Release from Merrill Lynch (PDF)» Go to News Release from Bank of America via PRNewswire» Go to Item from DealBook» Read More Add a comment The dismissal of a New York suit against Bear Stearns's directors and officers reinforces the principle that where the government forcefully intervenes, courts tread lightly. Go to Item from The Deal Professor» Read More Add a comment Rupert Murdoch's News Corporation may ask to be exempted from making a compulsory takeover offer for German pay-TV broadcaster Premiere should it pass the 30 percent shareholding threshold, a German magazine reported. Go to Article from Reuters via The New York Times» Read More Add a comment Qantas Airways warned investors its proposed $5.6 billion merger with British Airways faced major obstacles over the terms of the deal and stressed there was a reasonable chance talks would fail. Go to Article from Reuters via The New York Times» Read More Add a comment Electricite de France said Monday it has raised its stake in British Energy Group to 88.67 percent following its public takeover offer announced last month. Go to Article from The Associated Press via The New York Times» Read More Add a comment The United States Sugar Corporation is scheduled to meet Monday to review Florida's buyout proposal, but shareholders may not get a chance to consider a rival offer that could prove superior. Go to Article from The New York Times» Read More Add a comment Back to Top INVESTMENT BANKING Banks need to take a much broader view of investment risk as they dig their way out of the current financial crisis, and mortgage-backed securities need to become simpler and much more transparent, a senior U.S. Federal Reserve official said on Monday. Go to Article from Reuters via The New York Times» Read More Add a comment Merrill Lynch Chief Executive John Thain has suggested to directors that he get a 2008 bonus of as much as $10 million, but the battered company's compensation committee is resisting his request, The Wall Street Journal reported. Go to Article from The Wall Street Journal (Subscription Required)» Go to Article from Reuters via The New York Times» Read More Add a comment Switzerland's UBS, the world's largest wealth manager in terms of assets, could cut up to 4,500 more jobs in the near future, local media reported on Sunday. Go to Article from Reuters via The New York Times» Read More Add a comment Recent losses at Credit Suisse Group do not mean the end of investment banking at the Swiss group, its chairman was quoted as saying in an interview published on Saturday. Go to Article from Reuters via The New York Times» Go to Previous Item from DealBook» Go to Related Item from DealBook» Read More Add a comment European Union regulators say riskier banks must pay a higher fee for the government cash bailouts that help them survive the crisis. Go to Article from The Associated Press via The New York Times» Read More Add a comment Gavin MacDonald, the global head of mergers and acquisitions at Morgan Stanley, based in London, passed away on Friday night. He was 47. Go to Item from DealBook» Read More Add a comment As Wall Street's woes continue, more people are hoping to ride out the storm in business school, judging from reports of increased applications. Go to Item from DealBook» Go to Article from the Ventura County Star» Go to Article from the Yale Daily News» Go to Previous Article from The New York Times» Read More Add a comment The hemorrhaging of the financial sector is draining horse breeders of owners and lenders, according to The Financial Times, leaving an already difficult business in an even more untenable situation. Go to Article from The Financial Times» Read More Add a comment Back to Top PRIVATE EQUITY Apollo Management's Leon Black, one of Wall Street's buyout kingpins, is having a tough year, as several of his fund's portfolio companies totter. "Traditional private equity is dead and has been for a year," Mr. Black told The New York Times, later adding, "We've totally turned into a bond house." Go to Article from The New York Times» Read More Add a comment Chrysler's owner, Cerberus Capital Management, has used its wealth and deep connections in Washington to shape the debate over the foundering automakers to its advantage, The New York Times writes. Go to Article from The New York Times» Read More Add a comment To understand why endowments like Harvard's are selling more than $100 billion worth of buyout investments at a huge loss, Ivy Leaguers might have to think outside the box, Breakingviews says. Go to Article from Breakingviews via The New York Times» Read More Add a comment Investors in private equity and venture capital firms are suffering, and some may fail to heed calls to stump up the capital they promised to invest. Go to Article from The Financial Times (Registration Required)» Go to Article from The Wall Street Journal (Subscription Required)» Read More Add a comment When TV Guide, the prominent 55-year-old magazine was sold, in its entirety, for less than the price of a single issue, one has to ask: Does it have a chance at survival? Go to Article from The New York Times» Read More Add a comment Despite the problems plaguing the private equity industry these days, a chunk of institutional investors believe that their industry will continue to throw money into buyout funds, according to a study published in the latest Debevoise & Plimpton report on the industry. Go to Item from DealBook» Read More Add a comment Back to Top HEDGE FUNDS Kynikos Associates's Jim Chanos, one of the world's best-known short-sellers, is having a bumper year, New York Magazine reports: His fund has soared 50 percent, even as many rivals are floundering. Go to Article from New York Magazine» Read More Add a comment Citadel Investment Group, the U.S. hedge fund giant that has racked up hefty losses this year, is closing its Tokyo office and its Asia principal investment operations by the end of this year, according to press reports. Go to Article from Bloomberg News» Go to Article from Dow Jones via The Wall Street Journal» Go to Article from Reuters via The New York Times» Read More Add a comment Two hedge fund managers who followed Treasury Secretary Henry M. Paulson's original blueprint to bail out struggling U.S. banks and snapped up distressed mortgage assets, are now posting solid returns, The New York Post reported. Go to Article from The New York Post» Read More Add a comment Bill Fleckenstein, the hedge fund manager who became one of the most public defenders of short-selling, wrote in his Daily Rap column that he was closing down his firm, Fleckenstein Capital. Go to Item from Calculated Risk» Go to Fleckenstein Capital's Web Site» Go to Related Article from Bloomberg News» Read More Add a comment Investors in British hedge fund Centaurus Capital have rejected the firm's restructuring plans for its $1.2 billion Alpha fund, forcing a gradual liquidation. Go to Item from DealBook» Read More Add a comment Back to Top I.P.O. / OFFERING Stocks rose sharply Monday in Europe and Asia, lifted by government efforts to bolster economic growth. Go to Article from The New York Times» Read More Add a comment Chesapeake Energy, in an effort to assuage investor concerns about share dilution, said it will reduce the number of shares it plans to issue to pay for expansion plans. Go to Article from Reuters» Go to Press Release from Chesapeake Energy» Read More Add a comment Back to Top VENTURE CAPITAL Coskata, a cellulosic ethanol company, has managed to pull in a $40 million third investment round despite the recession, according to the company. Go to Article from VentureBeat via The New York Times» Read More Add a comment It looks like the economic downturn hasn't eliminated investment for cloud computing. RightScale, a Santa Barbara, Calif. company that manages applications in the Internet cloud, has raised $13 million in a second round of funding. Go to Article from VentureBeat via The New York Times» Read More Add a comment Back to Top LEGAL Congressional Democrats were drafting legislation Sunday for tight government control of the crippled American auto industry, including the possible creation of an oversight board led by an independent chairman or "car czar." Senator Christopher J. Dodd, the chairman of the banking committee that is drafting the legislation, called for the dismissal or resignation of Rick Wagoner, the chief executive of General Motors, which is the most imperiled automaker. On Friday, the heads of the Detroit automakers went before the House Financial Services Committee to make their case for a federal rescue. Go to Article from The New York Times» Go to Live Blog of the Hearing from The Lede» The ultimate price tag for a comprehensive bailout for G.M., Ford Motor and Chrysler is hard to pin down, but even the auto makers themselves are hard-pressed to dispute that it could cost as much as $125 billion, The New York Times said. Go to Article from The New York Times» Read More Add a comment Many in Washington contend that bankruptcies among the Big Three automakers would not have major ripple effects -- which is similar to what Treasury officials said before Lehman Brothers was allowed to fail. Go to Article from The New York Times» Daniel Alpert of Westwood Capital offered his opinion on how a bankruptcy filing by one of these auto giants might be handled. Go to Item from DealBook» Read More Add a comment A federal jury in Manhattan has found Bank of America liable in a securities fraud trial that centered on the sales of asset-backed securities and involved some of the biggest names on Wall Street. Go to Article from The New York Times» Read More Add a comment Since the subprime mortgage troubles exploded into a full-blown financial crisis last year, the three top credit-rating agencies -- Moody's, Standard & Poor's and Fitch Ratings -- have faced a firestorm of criticism about whether their rosy ratings of mortgage securities generated billions of dollars in losses to investors who relied on them. Go to Article from The New York Times» Read More Add a comment Marc Stuart Dreier, a high-living New York lawyer who has a gaggle of celebrity clients and a large firm that bears his name, was released from a Canadian jail on Friday after promising to return to court to face charges that he impersonated another lawyer on Tuesday at the offices of a large Canadian pension fund. Go to Article from The New York Times» Read More Add a comment Ryan Kavanaugh, one of Hollywood's most prominent film financiers, was arrested for drunk driving, speeding and driving with a suspended license in October while still on probation for an earlier conviction for driving under the influence of alcohol, at a time when his Relativity Media is facing several difficulties. Go to Article from The New York Times» Read More Add a comment General Electric's GE Capital may not be a bank, but the financing arm that is posing a headache for its corporate parent may still be woefully undercapitalized and underreserved against potential future losses, The New York Times's Gretchen Morgenson writes in her latest column. Go to Article from The New York Times» Read More Add a comment The New York Times Company plans to borrow up to $225 million against its mid-Manhattan headquarters building, to ease a potential cash flow squeeze as the company grapples with tighter credit and shrinking profits. Go to Article from The New York Times» Read More Add a comment Saying that the United States economy was likely to worsen before it improves, President-elect Barack Obama on Sunday pledged to pursue a recovery plan "equal to the task ahead," including the creation of a vast public-works program not just built around bridge and highway projects, but on creating "green jobs" and disseminating new technologies. Go to Article from The New York Times» Read More Add a comment Despite months of rescue efforts, hundreds of billions of dollars in government spending and an avant-garde apparatus of financial tools, the American economy has only worsened, and at a faster rate than nearly anyone predicted. Go to Article from The New York Times» Read More Add a comment South Korea's money-losing Hynix Semiconductor is making progress toward raising new capital from creditors and direct backing from the government is not being considered, officials said Monday. Go to Article from The Associated Press via The New York Times» Read More Add a comment Get home delivery of The New York Times for as low as $3.15 a week.

SEARCH DEALBOOK SITE DealBook | E-mail Preferences Help | Advertising Opportunities Stock exchanges running out of merger options December 8, 2008 Stock markets get high on Obama's largesse December 8, 2008 Buyout fund investors suffer credit boom hangover December 8, 2008 Video: Chrysler's Plea Robert Nardelli, the chairman of Chrysler, urged members of the Senate Banking Committee to approve federal aid for his company. More» A Yahoo Bid? Icahn Has Doubts Carl Icahn said a partial offer for Yahoo was likely to fall flat with shareholders. More» What's a Wall Street Chief Worth? With taxpayers' money on the line, creating packages that pay enough -- but not too much -- becomes an even thornier problem. More» Tracking the Bailout The New York Times tracks how the $700 billion Troubled Asset Relief Program is being doled out to banks, insurance companies and more. More» Revolving Door The latest hires, promotions and departures at Kirkland & Ellis, Fannie Mae, BlackRock and more. More» The Deal Professor A blog-within-a-blog that looks at mergers, private equity and corporate governance through a legal lens, written by Steven M. Davidoff, a professor at the University of Connecticut School of Law and a former lawyer at Shearman & Sterling. More» The Rescue Squad DealBook's special section looks at the people reshaping Wall Street and what the new landscape might look like. More» Lehman's Fall Full coverage of Lehman Brothers' dramatic slide into bankruptcy protection. More» The Bear Bailout Full coverage of the proposed takeover of the troubled investment bank -- and the crisis that led to the sale. More» DealBook for BlackBerry Get one-click access to DealBook to read the latest deal news throughout the day. Visit mobile.nytimes.com/bbinstall directly from your BlackBerry or by sending the text message "db install" to 698698. More information on DealBook for BlackBerry. News By Industry Airlines / Autos Basic Industries Consumer Goods Energy / Utilities Financial Services Food & Beverage Healthcare Media Real Estate Retail / Leisure Technology Telecom Tools & Resources GET QUOTES Look Up Symbol RESEARCH SUITE Portfolio Company Research U.S. Markets International Markets Mutual Funds SEND A TIP OR FEEDBACK E-mail us at dealbook@nytimes.com Dealboard

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