Excerpts: “Sam Zell and other former execs agree to pay $200M”

  • During court-ordered mediation in March, more than 50 former Tribune directors and senior executives agreed to settle with the litigation trust for $200 million, according to a motion filed May 31. The deadline for objections to the agreement is Monday, with a court approval hearing scheduled for July 11.
  • In addition to Zell, a number of Chicago business powerhouses are among the settling defendants. They include former Tribune Co. CEO Dennis FitzSimons; Crane Kenney, a former Tribune executive who is now president of business operations for the Cubs; Miles White, chairman and CEO of Abbott and a former Tribune board member; and Tim Knight, CEO of Tribune Publishing and a former Tribune Co. executive.
  • When the company emerged from Chapter 11 bankruptcy in December 2012, it was under the control of senior creditors Oaktree Capital Management; Angelo, Gordon & Co.; and JPMorgan Chase & Co. The Tribune Litigation Trust, which represents the unsecured creditors, filed a fraudulent conveyance lawsuit to recover losses, alleging the leveraged buyout was a breach of fiduciary duties by “virtually every participant” in the transaction.
  • The settlement agreement also excludes financial advisers to the leveraged buyout such as Citibank, Merrill Lynch and Morgan Stanley, with the litigation trust appealing an earlier dismissal against those defendants.
  • Tribune Media spun off the Chicago Tribune and other major newspapers into Tribune Publishing in 2014, retaining broadcast, real estate and other assets. In December, Nexstar Media Group agreed to buy Tribune Media for about $4.1 billion, pending approval from shareholders and federal regulators.

Source: Chicago Tribune