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CHICAGO-Real estate mogul Sam Zell may need to hand over control of The Tribune Co. to a group of banks and investors due to the company’s bankruptcy reorganization. According to a report in the Chicago Tribune the lenders hold $8.6 billion in senior debt.

While plans are still sketchy, the reorganization will likely focus around a debt-for-equity exchange. Sources say the deal could eliminate a $90 million warrant that Zell received when starting the $8.2 billion purchase of the Tribune in 2007. According to the article, “The warrant gives the Tribune Co. chairman the right to buy about 40 percent of the company for $500 million and is the basis of his control over Tribune Co.”

Zell also has a $250 million loan as part of the move to take the Tribune Co. private.

Experts question if this move to give the lenders control signals the exit of Zell. The Tribune report says, “Bankruptcy experts said the plan’s outline raises questions about whether the senior lender group would want to retain Zell and his management team or seek new leadership for the company. It also poses the question of whether Zell would want to stay without a large ongoing stake in the company.” Although, it is too early in the bankruptcy process to know how things will play out.

To read the full report in the Chicago Tribune click here.

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