Saturday, April 11, 2009

A Tiny Step for Labor

In one of the more outrageous financial maneuvers, Sam Zell used the Tribune pension fund to help finance his takeover of the corporation, which let him beat down workers.

Tribune Co. Subpoenaed Over Employee Stock Plan
Published: April 10, 2009

The Labor Department subpoenaed the Tribune Company over its employee stock plan, which was crucial to the purchase of the company by the billionaire Sam Zell, left. The company disclosed the subpoena, issued in March, in a bankruptcy court filing and said it had handed over the documents. A Tribune spokesman was not available for comment.

The agency’s questions relate to the Employee Retirement Income Security Act, a law intended to protect people in employee retirement plans. The stock plan was an important piece of Mr. Zell’s plan to acquire the company in an $8.2 billion deal that involved $13 billion in debt. He intended for the stock plan to become the largest owner of the company, which would let it avoid corporate taxes. That, in turn, was supposed to help a company turnaround.

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