WILMINGTON, Del., Sept. 26 (UPI) -- A new player is complicating the Tribune Co. bankruptcy case, parties on all sides said as talks began Sunday.
Aurelius Capital Management, a New York hedge fund, has been buying up Tribune bonds in recent months and has just bought out much of the stake held by Centerbridge Partners, another hedge fund that had been the most powerful junior creditor, the Chicago Tribune reported.
Mediation talks under U.S. Bankruptcy Judge Kevin Gross begin Sunday in Delaware. Tribune Co. and its creditors have already spent nearly two years wrangling, running up more than $180 million in professional fees through August.
The chances of a settlement are dropping, sources on all sides of the case who requested anonymity told the Tribune.
Aurelius has a history of purchasing the unsecured junior bonds of a bankrupt company at cents on the dollar and employing aggressive legal tactics to boost the bonds' returns as the case is resolved.
"We can assume that any settlement will not be acceptable to Aurelius," said one source close to the talks.
