- The Washington Times - Saturday, April 11, 2009

CHICAGO (AP) - The Department of Labor has begun an investigation into Tribune Co.’s employee stock ownership plan, a major piece of Sam Zell’s plan to take his media company private, the company said in a bankruptcy court filing.

A subpoena sent March 2 to the Chicago-based media company, which owns the Chicago Tribune and Chicago Cubs, requested “an extensive range of documents,” Tribune said in Thursday’s filing with the U.S. Bankruptcy Court in Delaware.

Tribune “substantially complied” with the subpoena on March 31, the paperwork said.

“We view this as a routine inquiry,” Tribune spokesman Gary Weitman said in a statement.

The Labor Department’s investigation deals with Tribune’s employee stock ownership plan, or ESOP, as part of an investigation under the federal Employee Retirement Income Security Act, the filing said. Under the act, the Labor Department is responsible for safeguarding pension-fund money from misappropriation.

A Labor Department spokesman did not immediately return a telephone message left after business hours on Friday by The Associated Press.

The ESOP has been scrutinized since real estate mogul Zell orchestrated a complex $8.2 billion buyout of Tribune in 2007.

In taking the company private under the ownership of an ESOP _ and Zell’s firm individual control _ Zell left Tribune with a $13 billion debt burden.

Chicago-based Tribune, which also owns the Los Angeles Times, The (Baltimore) Sun, The Hartford Courant and other dailies, as well as television stations, sought bankruptcy protection in December because of the debt and dwindling advertising revenues.

Former Times newsroom employees sued Zell and Tribune board members in September, saying they worried that Zell’s actions diminished the quality of the company’s products and its value. Their retirement funds were in jeopardy because contributions were largely being made to the ESOP through stock “overly encumbered with debt,” they said.

Tribune has denied the allegations and asked the bankruptcy court to stop action in the case.

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