Wilmington Trust Sues Tribune Lenders

A group of Tribune Co. creditors sued the banks behind the publisher's 2007 leveraged buyout, claiming the $8 billion in loans they arranged for the deal doomed the company to bankruptcy.

Wilmington Trust Co., the agent for bondholders owed $1.2 billion, filed the lawsuit late last week in U.S. Bankruptcy Court in Wilmington, Del., against JPMorgan Chase Bank, Merrill Lynch Capital Corp., Citibank NA, Bank of America NA and Morgan Stanley & Co.

The banks knew that the buyout "would render Tribune insolvent and, ultimately, drive it into bankruptcy," attorneys for the bondholders wrote in their complaint. The bondholders want to change the repayment order among Tribune's creditors so that they will be paid before those lenders.

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