Baltimore Sun

Baltimore Sun parent Tribune Co. is working with bankruptcy advisers at investment bank Lazard and law firm Sidley Austin to weigh its financial options, sources said Sunday.

“It’s an uncertain and difficult environment,” Tribune Co. spokesman Gary Weitman said Sunday night. “We haven’t made any decision. We’re looking at all of our options.”

Tribune Co., which has been struggling under a $13 billion debt load incurred last December when real estate magnate Sam Zell took the company private in an $8.2 billion leveraged buyout, faces a Monday deadline on $70 million of unsecured debt taken on by Tribune Co. before the deal. Sources said the company could draw on an existing line of credit with its senior lenders to pay the bill.

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The alternative is to renegotiate new terms with the banks that made its loans — Citibank, Bank of America, JP Morgan Chase and Merrill Lynch. Tribune’s debt trades on the open market for a fraction of its original value and analysts suspect those banks have already written off their exposure. Therefore, the lenders may be willing to negotiate a lower level of debt. But these negotiations are always uncertain, which is why Tribune has hired bankruptcy counsel, sources said.