Zell Blames 'Perfect Storm' for Tribune Bankruptcy

It has $7 billion in assets but nearly $13 billion and debts.

It has $7 billion in assets but nearly $13 billion and debts. With no way to overcome that, Tribune Co. filed for bankruptcy protection Monday.

Most of the debt was built up when real estate mogul Sam Zell bought the company last year. Most of the company’s actual equity is in the new employee stock plan that was created by the Zell takeover, but those assets are likely to disappear.

Tribune’s creditors, according to its bankruptcy filing, include major banks and several capital firms, as well as content providers and others in the TV industry: Warner Bros Television (owed $23.7 million), Twentieth Television ($8 million), Buena Vista Entertainment ($6.2 million) and NBC-Universal ($4.9 million).

“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,” said Zell, who also touted the restructuring progress the company has made.

The Chicago Cubs and Wrigley Field, which are up for sale, were not included in the petition, filed in Federal Bankruptcy Court in Delaware.

Tribune owns 23 television stations and several daily newspapers, including the Chicago Tribune, Los Angeles Times, Hartford Courant and Baltimore Sun.