A federal appeals court in Philadelphia has refused to accept a case from creditors unhappy with Tribune Co.’s plan to exit bankruptcy protection.
On Monday, the court rejected an emergency motion from Aurelius Capital Management, which holds Tribune notes and spearheaded opposition to Tribune’s plan.
Last month, a bankruptcy judge in Delaware required Aurelius and other creditors to post a $1.5 billion bond if they wanted his order approving Tribune’s plan put on hold while they challenged the decision.
After a U.S. District Court judge in Delaware refused to modify the hefty bond requirement, Aurelius turned to the appeals court. The appeals court refused to hear the case, saying the creditors were appealing an order that was not final.
The challenge to the plan continues in federal district court, although Tribune, which publishes The Baltimore Sun and other newspapers, isn’t barred from implementing its plan in the meantime. A key issue is the fairness of a settlement of legal claims against banks and others involved in Tribune’s 2007 buyout, which left it with $13 billion in debt.