Saturday, March 6, 2010

Shame on Sam Zell and Shame on Judge Kevin Carey

The NYT's Andrew Ross Sorkin explained in a recent New York Times article: "Real-estate billionaire Sam Zell used more than $13 billion in loans to take control of Tribune in 2007. One year later, he put the company into bankruptcy."

Mr. Sorkin goes on to say: "Mr. Zell financed much of his deal’s $13 billion of debt by borrowing against part of the future of his employees’ pension plan and taking a huge tax advantage."

Tribune employees ended up with equity, and now they will be left with very little, if anything at all.

As Mr. Newman, an analyst at CreditSights, explained at the time in that same New York Times article on the Tribune bankruptcy: “If there is a problem with the company, most of the risk is on the employees, as Zell will not own Tribune shares.” He continued: “The cash will come from the sweat equity of the employees of Tribune.”

Mr. Zell recently asked for, and the U.S. Bankruptcy Court approved, $45 million dollars in executive bonus payments to his management team for their work at the bankrupt Tribune Company in 2009.

Now, Sam is adding insult to injury by including an additional bonus program in his reorganization plan that would pay as much as $20 million more in bonuses to the company’s top 30 to 40 executives.

U.S. Bankruptcy Judge Kevin Carey, who approved the first $45 million dollar executive bonus plan, will no doubt be happy to allow Sam to give his cronies an additional $ 20 million bonus bucks, once Tribune files its reorganization plan.

All these millions in bonus dollars to Tribune executives while benefit cuts, salary freezes, and layoffs are the order of the day for the working people at Tribune's newspapers and TV stations.

Shame on Sam Zell and shame on Judge Kevin Carey.

Bob D -Broadcast Union News

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