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Judge in Tribune Co. bankruptcy to allow greater openness in case

WILMINGTON, Del. — The judge in Tribune Co.’s bankruptcy is allowing the unsecured creditors committee to file an uncensored version of a lawsuit against key players in the leveraged buyout that saddled the company with debt.

The new, unredacted version could shed light on the creditors’ allegations about Morgan Stanley’s role in connection with the 2007 buyout. Morgan Stanley was a financial advisor to Tribune’s board in connection with the buyout engineered by real estate mogul Sam Zell, who also is a defendant in the lawsuit.

Judge Kevin Carey authorized the unredacted complaint on Tuesday. The unredacted version wasn’t immediately available.

Carey also set aside the week of March 7 for a trial on whether to approve Tribune’s proposed reorganization plan, or any of three competing plans filed by creditors.

The debt Tribune took on during the buyout helped land the company in Chapter 11 in December 2008 as the newspaper industry foundered against the recession and competition on the Web. Tribune owns the Chicago Tribune, the Los Angeles Times and The Baltimore Sun along with other newspapers and several broadcast stations.

The group of unsecured creditors alleges that greed and misconduct of the media company’s lenders, advisors and own leaders led to its financial downfall. A committee representing unsecured creditors, which are relegated toward the back of the repayment line, is attempting to recover billions of dollars from banks and company insiders. The group alleges that the banks were so interested in reaping huge fees and getting old loans repaid that they repeatedly ignored warnings that the 2007 buyout would bury Tribune in too much debt.