But for those trapped in the Tribune Co. saga against their will, arguments about creditors' rights and legal process seem more like a smoke screen to justify how Wall Street interests are allowed to profit with little or no concern for the health of a company or its employees.
For Tribune Co., its employees and many of its smaller creditors, bankruptcy became a debilitating period of missed opportunities and stalled strategy. The cost to Tribune Co. in legal and professional fees alone will likely run to more than $500 million.
Astoundingly, as many as 35,000 unwitting former Tribune Co. shareholders are now the target of pending creditor litigation that could potentially force them to give back money they received more than five years ago. Most can't fathom how the simple act of buying and selling stock in a major U.S. company could someday land them in front of a judge.
"What seems grossly unfair," Colorado investor Mark Lies wrote to Carey in 2011, "is there doesn't appear to be any adult supervision looking out for the average investor like myself. ... (Y)ou have unemotional, ruthlessly efficient and litigious investors attempting to extract whatever they can from whomever they can."
Carey sounded his own concerns in an opinion at a pivotal moment in the case.
"There is no moral to this story," the judge wrote, citing the fable of the Scorpion and the Fox, a tale of mutually assured destruction. "Its meaning lies in the exposition of an inescapable facet of human character: the willingness to visit harm upon others, even at one's own peril."
Corporate bankruptcy was never supposed to be easy, but it didn't become blood sport until specialized Wall Street investment firms got involved.
For decades, Chapter 11 protection was used by struggling companies and their managers to negotiate with lenders and anyone else owed money. The goal was to restructure the debt, with the guiding principle of preserving the company's long-term prosperity. Ownership often changed, but the idea was to maximize recovery for all.
Companies were capitalized with relatively straightforward financial instruments -- stocks, bonds and bank loans. Executives tended to know who their major creditors were and what motivated them, so consensus was usually within reach.
But in the high-octane global financial system that produced the complex Tribune Co. buyout, the sense of an enduring partnership between a company and its creditors has become an anachronism.
Balance sheets these days are like 3-D chessboards built on multiple classes of debt and other securities. Lenders like JPMorgan Chase or Citigroup dilute their interest in the company almost immediately by making loans, then selling them in pieces to other investors, who, in turn, slice and dice them again to create new derivative securities that eventually find their own markets.
When a company runs into trouble, these widely fragmented claims begin to churn. Worried investors sell, driving down the price of a company's securities. Soon the deflation attracts distressed-debt investors with a specialized understanding of how to profitably play the bankruptcy game.
This leads to what Jonathan Lipson of the Temple University law school calls a "shadow bankruptcy system," a largely unregulated marketplace where private funds trade claims behind closed doors, building positions they hedge with derivatives and other financial instruments.
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