A JPMorgan representative said the bank hadn't yet decided but was leaning toward making the loans because the risk of not making them was greater.
Citi's Persily had "not yet landed," but she was leaning the other way since there was "more risk" if the company were to "end up in bankruptcy."
Kaplan at Merrill Lynch was "leaning not to fund" since it was "reasonable" Tribune was not solvent. Still, Merrill was "not planning on being a lone wolf."
Petrik didn't record BofA's leanings, but he noted without explanation that "if in good faith — good defense."
On the morning of Dec. 19, JPMorgan's Lee called Zell.
Despite the banks' pleading over the previous three months, Zell had never agreed to put in more equity. And Tribune Co., though it had earlier agreed to trim the debt by $500 million, had rejected various late-inning requests to restructure the deal.
Known as one of the pioneers of the syndicated loan business, Lee typically exudes the voluble self-confidence of a Wall Street heavyweight. But on this day, court records show, he was seeking assurances from a longtime client. He wanted to hear that Zell was committed to making the deal work.
"He said all the right things," Lee later reported to Dimon. In an email to another colleague, he wrote: "(Zell) could not have been any clearer and more confident that the company was solvent ... his reputation being totally on the line. ... I told him we were totally banking on him to make this work and he said 'I don't make commitments I can't keep.'"
That was good enough for Lee and Dimon. The next day, JPMorgan and the other banks closed step two.
Less than a year later, its media outlets still making money but burdened by too much debt, an insolvent Tribune Co. filed for Chapter 11 protection in U.S. Bankruptcy Court in Delaware.