Tribune asks bankruptcy court to halt Wilmington Trust complaint

By Caroline Salls

Pittsburgh, March 19 - Tribune Co. asked the U.S. Bankruptcy Court for the District of Delaware to rule that Wilmington Trust Co. has violated the automatic stay by filing a complaint for equitable subordination and disallowance of claims, arguing that the complaint is an attempt to derail efforts to negotiate a plan, according to a Thursday court filing.

Tribune is also asking the court to order Wilmington Trust to prove why it should not be held in contempt and to halt all proceedings related to the complaint.

"The complaint is an obvious and willful violation of the automatic stay by purporting to assert causes of action belonging to the debtors' estates," Tribune said in the filing.

"Wilmington Trust's action also flouts the court's recent explicit directive that the parties should, for the time being, be permitted to continue their efforts to negotiate a consensual plan of reorganization without the distractions attendant to litigation, and [it is] a transparent effort to thwart those negotiations."

In addition, the company said Wilmington Trust sought appointment of an examiner and tried to intervene in a motion filed by Tribune's official committee of unsecured creditors for leave to file a complaint.

However, Tribune said the court did not grant those motions based on testimony from the company's witness about the substantial and ongoing efforts to achieve a negotiated resolution of various potential claims and causes of action through a consensual plan.

"As the court made abundantly clear, in light of this ongoing process, there would be a great advantage to avoiding the collateral chatter created by the proposed litigation," Tribune said in the motion.

"Wilmington Trust's actions can only be understood as a renewed effort to upend the negotiation process by means of litigation that plainly seeks to usurp causes of action belonging to the debtors' estates."

Tribune, a Chicago-based media company, filed for bankruptcy on Dec. 8, 2008. Its Chapter 11 case number is 08-13141.

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