Friday, September 10, 2010

ESOPs Are Legitimate, But Zell's Deal Smells

By David Lewis
Published in the Letters to the Editor section of The Wall Sreet Journal

My opinion is that Sam Zell well deserves his hell, and that the employees of the Tribune Company probably feel he deserves a lot worse ("Zell's Hell" by Holman Jenkins, Business World, Sept. 1). Sam Zell and his associates, with their clever leveraged buyout scheme, took a profitable company and saddled it with so much debt that it could not possibly survive, resulting in a predictable bankruptcy.

Mr. Zell conveniently invested only a trifling amount of money (for him) and had very little to lose.

Some of the previous owners made huge profits in the buyout, and should also be in the same circle of hell as Mr. Zell.

Possibly the bankruptcy court will make an effort to punish those responsible for this fraudulent transaction, but I sincerely doubt it with the nature of the judiciary we have, and it is certainly too late to do anything to make amends to the many Tribune Company employees who have lost their livelihoods, and who never got the chance to make a newspaper company work in the modern world.

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