Los Angeles Times
The employees, who filed their suit in 2008, contended that the leveraged buyout that resulted in creation of the Tribune Co. employee stock ownership plan (ESOP) violated federal pension law. 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, reports Jerry Hirsch. (Attorneys are asking for 25 percent of the settlement, or $8 million.) Former Los Angeles Times auto columnist Dan Neil — lead plaintiff in the case — says that “whatever money comes to the members of the class isn’t much cash, but at least it was acknowledgment that they were wronged. This was a horrible deal for the employees of Tribune.”
From: Tribune Communications
Sent: Friday, August 19, 2011 7:11 PM
Subject: Message from Don Liebentritt/Settlement of ERISA claims
Today Tribune is announcing a multi-party agreement to settle claims alleging violations of the Employee Retirement Income Security Act of 1974 (ERISA) in connection with the company’s Employee Stock Ownership Plan (ESOP). The claims were initially brought in 2008 in a lawsuit against the ESOP Trustee, GreatBanc Trust, by former Tribune employees. The agreement also resolves claims asserted by the United States Department of Labor in connection with the ESOP and the DOL’s and GreatBanc’s objections to Tribune’s proposed plan of reorganization. (The details of the proposed agreement are contained in the attached press release.)
The agreement must still be approved by the Bankruptcy Court for the District of Delaware and by the United States District Court for the Northern District of Illinois. Under the terms of the agreement, the company will contribute $4.45 million of a $32 million payment for the benefit of Tribune ESOP participants and to cover expenses. If the settlement is consummated, this money will be allocated to your ESOP account and then transferred to your 401(k) account.
This is a good result for all parties and ensures a smoother exit from bankruptcy once we have a confirmed plan. We’ll keep you updated as we have additional information to share regarding the payment to your ESOP account.
Don Liebentritt
Chief Restructuring Officer
……….
Earlier posts:
> LAT newsroom staffers file class-action lawsuit against Zell and Tribune
> Neil quits LAT, has two departing words for Zell (they start with F and Y)
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