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The suit accuses Zell and “his accessories” on the Tribune Company board of threatening to destroy the company and the newspapers it own, “doing so illegally, without consideration for the employee-owners, without respect for the institution, and with a focus on liquidating company assets to line their own pockets.” And according to plan — for the suit says Zell took the company private “with the intention of breaking up and selling the assets because he saw a collection of assets worth billions of dollars that he could purchase . . . with a minimal outlay of his own money.”
The ingeniously structured deal by which Zell took over the company last year made its employees, in the guise of a Tribune ESOP (Employee Stock Ownership Plan), its nominal owners. “The deal included borrowing billions against the assets — the Tribune Company’s debt went from less than $4 billion to nearly $13 billion overnight,” says the suit. “Zell took over a highly valuable Company, imposed on it the most encumbered balance sheet in the newspaper industry, and avoided any real personal risk or responsibility, all while enjoying the benefits of a tremendously valuable tax structure and letting employee ‘owners’ bear the damaging consequences going forward.”
Here’s a PDF of the entire lawsuit.
