Sunday, August 21, 2011
Times Employees -- $32 M. for Pension Sell-Out
TheWrap -- L.A. Times employees who sued over the 2007 Sam Zell-led takeover of the company using their pension plan have won a $32 million settlement.
According to the L.A. Times, the settlement was made with GreatBanc Trust, the trustee for Tribune Company's employee stock ownership plan.
It is the coda to a recklessly inventive plan dreamed up by Zell that placed all the risk for buying the Tribune Company on the employees’ pension plan, while it shared the ownership with the billionaire.
The plan used the pension fund to create an employee stock ownership plan (ESOP) for the tax benefits it offered - and pushed Tribune's debt to $12.5 billion. Bad surprise (though not a surprise to many observers): Tribune went bankrupt a year later.
About 13,000 current and former Tribune employees will divide the $32-million settlement, which will go into their retirement accounts after legal fees are deducted. The amount each employee receives will depend on their salary at the time. Attorneys are expected to receive 25% of the settlement.
at 2:29 PM