Tribune Co., a national media company that owns local news outlets including television stations in San Diego and Los Angeles, as well as The Los Angeles Times, is currently going through Chapter 11 bankruptcy. Last week, as part of the bankruptcy process, a federal judge ruled that Tribune was allowed to pay up to $45 million in bonuses to company managers as part of an incentive program.
Tribune has been going through bankruptcy since the company filed for Chapter 11 protection in 2008. This is not the first time the company has been allowed to pay bonuses to its employees, and there were no objections to the program from Tribune's creditors.
The bonuses are just part of the company's efforts to emerge from Chapter 11 bankruptcy protection on better financial footing. As mentioned in previous posts, Chapter 11 is intended for companies that seek to remain in business while addressing debt concerns, as well as submitting a realigned business model in order to emerge as a more streamlined, efficient organization.
Tribune is attempting to reach the end of what has been a long process, lasting four years thus far. There will be a court hearing in June to rule on the company's latest efforts to reorganize and incentivize.
Bankruptcy protection can be a solid option for companies that have become mired in a complicated and burdensome debt situation. Often the restructuring of a business model can be the answer for a company that has become too entangled with debt obligations to conduct business effectively.
Source: San Francisco Chronicle, "Bankruptcy judge authorizes Tribune bonuses," Randall Chase, May 4, 2012