Tribune considers bankruptcy

More bad news in the media industry; most young journalists I know are wondering if they haven't lashed themselves to the mast of a sinking ship.  The problem at the Tribune papers is most accute; they company did an LBO last year that has weighed it down with debt payments during a period of revenue decline.  But there are rumors that even the venerable New York Times is going to have some debt problems in the spring (though, to be clear, no real reason to fear an NYT bankrutpcy).

The employee ESOP looks primed to take the biggest hit, since they own all the remaining equity in the company.  I'm sure there's a special place in hell reserved for Sam Zell, the genius who took it private and made his own debt senior to the ESOP.  On the other hand, DealBook reports that the pension fund is actually overfunded:

Tribune's ESOP is separate from the pension plans for Tribune workers that existed before the buyout. It is not clear how those pension plans, which Tribune has said are actually overfunded, would fare in a bankruptcy case.

In the months leading up to the deal, David Hiller, the publisher of the Tribune-owned Los Angeles Times at the time, reassured employees that "existing pension plans and 401(k)s" were "fully protected," according to an e-mail cited the lawsuit.

What happens to an overfunded pension plan in the event of a bankruptcy?  The major news stories tend to focus on underfunded plans whose parents lack the cash flow to bring back to par.  Do overfunded plans see the excess doled out to creditors, or do they get to keep the extra booty?  And does that suggest a strategy for employee owned firms in trouble?

Update:  Yup, it's official.