Faced with a mountain of debt and shrinking advertising revenue, the Chicago-based Tribune Co., which owns the Los Angeles Times, filed for Chapter 11 bankruptcy protection yesterday.

The company made the move as a way to restructure payments due to banks and other creditors following the sale of the company to real estate magnate Sam Zell last year, sources said.

Tribune's Board of Directors has approved the action filed in federal court in Delaware, the Los Angeles Times said.

According to the paper, the Tribune Co. had about US$300 million in cash on hand, enough to make a US$70 million payment due yesterday. But Tribune executives were unable to strike a deal with lenders to restructure the rest of the company's debt.

A US$512-million payment, related to Zell's highly leveraged buyout, is due in June. Tribune is reportedly counting on selling the Chicago Cubs and Wrigley Field to cover that bill. The projected value of the Cubs and Wrigley Field is estimated at around US$1 billion.

Advertising revenue for Tribune's eight daily newspapers and 23 television stations, which include KSWB-TV in San Diego, has fallen sharply over the past year and is expected to keep falling in 2009, the newspaper reported.

In an e-mail to Tribune employees, Zell said the company will continue with business as usual.

"This filing should not impact the way you do your jobs on a day-to-day basis. We will continue to operate responsibly in a challenging environment -- aggressively managing costs and maximizing revenue opportunities. These are all things we would do whether or not we were restructuring our debt," Zell wrote.

"I am proud of the work we have done at Tribune in the last year. I've seen strong determination to take hold of this company and put it on a new course. As a result, we've reduced costs, gained market share, laid the groundwork for creating a news business model out of traditional media. This restructuring will give us the time we need to build that model, to secure sustainable and growing cash flow, and to achieve the success the talented partners in this company deserve."