Judge sets dates in Tribune bankruptcy

WILMINGTON, Del. — A judge presiding over Tribune Co.’s Chapter 11 bankruptcy case heard initial arguments Thursday in the company’s dispute with actor Warren Beatty over the TV and movie rights to comic book character Dick Tracy.

Tribune Media Services, a Tribune subsidiary, has been feuding with Beatty for years over the rights to the cartoon detective. Tribune attorneys want the bankruptcy judge to declare that the media company owns the rights, arguing that they represent tens of millions of dollars in potential income to the bankruptcy estate.

But attorneys for Beatty are pushing for a jury trial in California, where he filed a federal lawsuit against Tribune last year. They want Tribune’s bankruptcy filing dismissed.

On Thursday, Judge Kevin Carey agreed to accept initial briefs in the dispute by June 2, in advance of a June 10 hearing.

Tribune, which owns the Los Angeles Times, Chicago Tribune, The Sun of Baltimore and other dailies, as well as 23 TV stations, sought bankruptcy protection in December, citing declining advertising revenue and a debt load of $13 billion.

Beatty sued the Tribune in November, before its bankruptcy filing, in response to the company’s assertion that the Tracy rights had reverted to Tribune because he had reneged on a 1985 agreement. Beatty’s attorneys want Carey to lift the automatic stay that bankruptcy filings impose on litigation involving debtors, so that Beatty can proceed with his lawsuit.

Gregg Galardi, an attorney for Beatty, argued that Carey should not allow discovery in the bankruptcy dispute to proceed until he rules on a motion to dismiss, which attorneys for Beatty plan to submit next week.

But Michael Doss, an attorney for Tribune, argued that discovery should get under way even while questions over jurisdiction remain unsettled.

“This dispute is going to proceed in some court, either in federal court in California or before your honor here in Delaware. … Getting the ball rolling, I think, is appropriate rather than allowing it to sit for a period of time.”

Doss also rejected Galardi’s argument that the Dick Tracy dispute was not a “core matter” in Tribune’s bankruptcy, but a simple third-party contract action.

Carey decided to review briefs from both sides before determining how to proceed.

“I’m not inclined to order that discovery move forward at this point,” the judge said. “I’ll see what motions are filed.”

The agreement at the center of the dispute paved the way for the 1990 movie “Dick Tracy,” in which Beatty starred. According to the agreement, Tribune could seek reversion of the rights granted to Beatty if, within five years of the movie’s release, he had not begun principal photography on another feature film or television series or special.

The agreement was amended in 1988 to allow Beatty to assign certain rights to Disney for an ice show in the mid-1990s. According to a 2006 lawsuit filed by Beatty and later dismissed, Disney reassigned the rights to Beatty in 2005, without Tribune’s consent.

In a separate ruling Thursday, Carey scheduled a June 30 hearing involving a defamation case against the Orlando Sentinel, one of the Tribune’s newspapers.

The plaintiff in the defamation case, Dr. E. Michael Gutman, died Wednesday, the day before Carey considered his request to allow the case to proceed in Florida state court, where a trial is set for June 1.

Jason Cornell, a lawyer representing Gutman in the bankruptcy case, told Carey the family wants to proceed with his request to lift the automatic stay. While agreeing to schedule a hearing, the judge noted that, with Gutman’s death, “there needs to be an appropriate estate representative.”

Gutman, a psychiatrist and pain clinic owner, sued the Sentinel in 2005, seeking $600 million in damages in connection with a series of articles in 2003 alleging that doctors in Florida were overprescribing the painkiller OxyContin. Gutman claimed that one article implied he was responsible for the deaths of 11 patients who overdosed on prescription painkillers.