Settlement Would Trim $350 Million From Tribune's Billion-Dollar Tax Bill

By: E&P Staff A settlement offer in a tax case Tribune Co. inherited from Times Mirror Co. would trim $350 million from the $1 billion tax payment it made after an adverse 2005 Tax Court decision, the Chicago media giant said after markets closed Friday.

The Tax Court disallowed a tax-free "reorganization" of the publishing subsidiary Times Mirror sold before Tribune's 2000 acquisition of the chain. With a similar tax case, the total bill -- which Tribune paid in 2005 -- was approximately $1 billion, with an net outlay of $850 million after deductions, the company said at the time. Tribune appealed the decision.

Tribune said it had filed a document with the Seventh Circuit U.S. Court of Appeals saying "counsel for both parties are optimistic that the case can be resolved without the intervention of the court."

The court has agreed to defer oral arguments set for Tuesday for 90 days "to allow for governmental review and approval of the offer," Tribune said.