By: E&P Staff
A judge has ruled that Sam Zell can’t be made to pay for his company’s retirement fund losses — a blow to workers who claim the Tribune Co. CEO caused the company’s employee stock ownership plan to lose value, Bloomberg Businessweek reports.
“Tribune is not a party to this case, so the court cannot order relief that would involve repayment of funds that originated with Tribune,” and not the employees’ stock ownership plan, U.S. District Judge Rebecca Pallmeyer in Chicago said Monday. The workers maintain that Zell is a fiduciary for the plan.
Tribune employees brought suit against Zell and his company EGI-TRB LLC two years ago after he took the Chicago-based newspaper publisher private in an $8.3 billion deal, alleging that Zell used their plan to buy back shares and in the process saddled it with unsustainable debt. The employees sought disgorgement of payments made to Zell and EGI-TRB by Tribune in the acquisition.
Tribune Co. filed for bankruptcy court protection on Dec. 8, 2008 — less than one year after going private. The company’s creditors have alleged the buyout was a fraudulent transfer because it added more than $8 billion in debt to the company while benefiting only Zell and his investors.