In re Tribune Co.

In the case of In re Tribune Co., some of the creditors of the bankrupt Tribune Co. objected to Tribune’s plan of reorganization. The 3rd Circuit held that the text of § 1129(b)(1) of the Bankruptcy Code supersedes strict enforcement of subordination agreements. In a situation of cramdown plans and subordinated sums, the comparison of similarly situated creditors is tested through a more flexible unfair-discrimination standard.