Judge Rejects Both Tribune Bankruptcy Plans

By Lucas Shaw

The Wrap

U.S. bankruptcy judge Kevin J. Carey has rejected Tribune Co.’s plan for reorganizing the company so that it can emerge from bankruptcy. A rival proposal from Tribune creditors did not pass muster either.

Tribune, a media empire that includes newspapers like the Los Angeles Times and Chicago Tribune, as well as more than 20 broadcasting properties, filed for Chapter 11 bankruptcy in December of 2008. That came a year after real-estate tycoon Sam Zell took the company private.

Carey began his 126-page opinion with a story, “The Scorpion and the Fox.” He said there is no moral to it, but that it reveals an “inescapable facet of human character: the willingness to visit harm upon others, even at one’s own peril.”

He then detailed the many ways in which neither plan could settle a dispute that is now almost three years old, and threatened to appoint a trustee to resolve the  case if neither side can reach a suitable resolution.

Under both plans, JP Morgan and other lenders would be the majority owners.

Judge rejects reorganization plans for Tribune

BY DAVID ROEDER, Business Reporter 

Chicago Sun-Times   

October 31, 2011

Because of a ruling issued on Halloween, Tribune Co.’s “deal from hell” lives on.

A federal bankruptcy judge Monday rejected two competing plans for the reorganization of Tribune, the Chicago-based publishing and broadcasting company that was driven into Chapter 11 by mogul Sam Zell’s ill-timed and over-leveraged buyout. 

Zell called the $8.2 billion sale the “deal from hell” upon its consummation in 2007.

But that was before the real fun even started. A year later, the Tribune, saddled with $13 billion in debt and with advertising in a steep, industry-wide fall, filed for bankruptcy. In the three years since then, creditors have wrestled over who gets what in a reorganized company and how to handle lawsuits against the parties who approved the original deal.

U.S. Bankruptcy Judge Kevin Carey said in a 126-page opinion that he could approve neither of the two plans presented to him. His ruling suggested that the company could be in for months of costly court proceedings and uncertainty about its fate. Many observers suspect that when creditors do get control, they will break up its properties and perhaps sell the broadcast stations, which generate the bulk of the profit.

But Carey tried to downplay any conclusion that his ruling would invite more delay. The Tribune, he wrote, “must promptly find an exit door to this Chapter 11 proceeding. The court is equally resolute that, if a viable exit strategy does not present itself with alacrity, and despite any disruption to management, as well as the added cost and delay this might inevitably occasion, the court intends to consider, on its own motion, whether a Chapter 11 trustee should be appointed.”

Tribune owns the Chicago Tribune, the Los Angeles Times, other major newspapers and more than 20 broadcasting stations, including WGN television and radio. Company spokesman Gary Weitman said late Monday, “We are reviewing the judge’s decision and will have no comment until we have finished studying it.”

Both completing plans would have left Tribune under the control of JPMorgan Chase & Co. and hedge funds Angelo, Gordon & Co. and Oaktree Capital Management, the leading unsecured creditors. But a plan advocated by other debt holders, including Aurelius Capital Management LP, seeks to recover more money in litigation. 

Aurelius is known for playing legal hardball.

Aurelius was emboldened by the findings of a court-appointed examiner, who ruled last year that part of the Zell buyout may have been a “fraudulent conveyance” that automatically rendered Tribune bankrupt.

Carey rejected both plans for several reasons, some technical, but spoke more favorably of the leading creditors’ proposal. He said it provides Tribune “with more certainty regarding preservation of estate value and a better foundation for revitalizing business operations.”

A hearing in the case is scheduled for Nov. 22 in Wilmington, Del.

NBC’s 10 Owned Stations Growing Newsgathering; 130+ New Jobs Planned

By Chris Ariens on October 31, 2011

NBC Universal has announced it is hiring for more than 130 positions across the 10 Owned & Operated stations.

“People will always need local news and information. How they get it will change,” says Valari Staab, president of the NBC Owned Television Stations group. “Television has shown it’s done nothing but increase, not decline, with what’s happening with the Internet.”

Ahead of Comcast’s acquisition of NBCU earlier this year, the companies met with the FCC to explain their commitment to local news. In part, the company agreed to, “maintain at least the current level of news and information programming on NBC’s and Telemundo’s owned-and-operated (“O&O”) broadcast stations, and in some cases expand news and other local content.”

Staab, who was named president of the NBC Owned Television Stations group in April, announced what the expansion means:

Jim Watkins Offically Out at WPIX in New York

By Merrill Knox on October 28, 2011

Nearly a month after FishbowlNY reported Jim Watkins was out the door at New York City CW-affiliate WPIX, the station has finally confirmed the longtime anchor’s departure.

“Jim Watkins and WPIX-TV have decided to end their relationship after 13 years and three Best Newscast Emmy Awards,” WPIX said in a statement.

The station has disputed the original report that Watkins had been fired and was no longer welcome in the WPIX building. For more details, visit FishbowlNY.

Anchor Jim Watkins Officially Ends Association With WPIX

By Jerry Barmash on October 28, 2011

The worst kept secret has finally been made official today. Veteran WPIX anchor Jim Watkins has left Channel 11 as FishbowlNY reported exclusively on September 30.

 

The station, in a statement, announced a parting of company with its longtime anchor, without explaining why.

“Jim Watkins and WPIX-TV have decided to end their relationship after 13 years and three Best Newscast Emmy Awards. PIX11 salutes Watkins’ years of service to the station and to the community during his time as a valued newscaster at the station.  Jim bids a fond farewell to his many PIX co-workers over the years, especially Kaity Tong.”

It’s a different tone than we reported last month, when multiple sources said Watkins was fired earlier, and he was not permitted back in the building.

News director Bill Carey, though, was quick to squelch our report, saying Watkins “remains employed by WPIX.”

As Tong immediately assumed Watkins weekend anchor duties, people with knowledge of the situation told FishbowlNY that his name remained on the station’s weekly schedule.

However, sources have maintained that Watkins was dismissed.

FishbowlNY has made several attempts to speak with Watkins throughout this four-week ordeal. Once again, though, our interview request was turned down today.

Watkins joined WPIX in 1998, and had co-anchored the weeknight newscasts until Jodi Applegate was hired in October 2010.

VIDEO - Fox NY News Crew Beaten By Police While Covering Occupy Wall Street - #OWS

Here's footage of last Wednesday night's NYPD melee near Wall Street.  This clip provides a timeline and explains how the situation turned violent.  Runs 90 seconds.

Source - Media Bistro

A WNYW-Fox news crew was maced and beaten by police on Wednesday night while covering the Occupy Wall Street protests.

Reporter Dick Brennan and photographer Roy Isen got caught in the middle of an altercation between police officers and a group of protesters, at the end of a day spent covering the ongoing demonstrations in lower Manhattan.  Brennan was struck in the stomach with a baton and Isen was hit in the eyes with pepper spray.

“Since the arrests over the weekend, these demonstrations have been mostly peaceful.  That’s until tonight,” Brennan reported.  “And I can tell you because my photographer and I got caught in the middle of things when the pepper spray and the night sticks started flying.”

Related Stories:

• GRAPHIC VIDEO - NYPD Beats Wall Street Protesters In Baton Wielding Melee, Dozens Arrested

• VIDEO - NYPD Cop On Wall Street Brags: "My Little Nightstick Is Going To Get A Workout Tonight, Hopefully"

Stop Police Attacks On Working Journalists

 

By now, much of the nation has seen stories and images from this week's Occupy Oakland protests, which ended with police in riot gear and protestors struggling through clouds of tear gas.

Less visible is what happens at the other end of the lens: The working journalists, both freelance and staff, who put themselves in harm's way to ensure the story reached the larger public.

Journalists know that their jobs can be dangerous. What they don't expect is to be detained, attacked or otherwise interfered with by police -- as happened to at least three journalists in Oakland this week. All were clearly wearing press passes and carrying professional photo gear.

Please stand with working journalists and tell Oakland officials that this is unacceptable: Police must learn to recognize and respect a press pass.

Click through to send a letter to City Hall, and please help us spread the word by forwarding this e-mail, or by tweeting or sharing the link on Facebook.

The Newspaper Guild • 501 3rd Street NW • Washington, DC 20001 • 202-434-1100

Huge NLRB Victory Restores Union Rights to NABET-CWA Represented NBC 'Content Producers'

In a resounding victory for NABET-CWA members, an NLRB ruling out of Region 2 in New York City orders NBC to reinstate the bargaining rights of "content producers," a title the network created three years ago to strip union representation from nearly 100 photographers, editors and writers.

 

"On behalf of our affected members and their families, we are extremely pleased with this outcome," NABET-CWA President Jim Joyce said. "NBC wasted shameful amounts of money to pay for outside legal counsel and consultants just so that it could take away union-negotiated wages and benefits from its workers, many of whom have been loyal NBC employees and NABET-CWA members for years."

 

NBC tried to claim that it was consolidating work and creating new, non-union jobs. But the ruling said testimony at hearings this year in New York, Los Angeles, Chicago and Washington, D.C., made it clear that so-called content producers were doing the same work they'd always done, just with a different title.

 

 "The evidence warrants the conclusion that content producers perform the same basic functions previously performed by bargaining unit employees," said Elbert Tellem, NLRB acting director for Region 2 (New York).

 

Because NABET-CWA filed the cases as "unit clarification," NBC has limited rights of appeal. Procedure allows for a full NLRB hearing but no further appeals in federal court, Joyce said.

The decision affects both NABET members who lost their bargaining rights, as well as new employees hired as content producers. Their rights are expected to be restored without delay, Joyce said, even while NBC pursues an NLRB appeal. Content producers at NBC and NBC-owned stations in New York, Chicago and Los Angeles are directly affected by the ruling.

The decision comes as NABET and NBC begin the fourth year of negotiations for a new contract. In August, NABET members overwhelmingly rejected an NBC proposal that would have rolled back seniority and benefit provisions, among other concessions.

 

The NLRB ruling that will restore union rights to about 100 NBC content producers was a big boost this week for NABET-CWA members as they continue their fight for a fair contract at the network. Pictured are Local 52031 members outside the Washington, D.C., studios.

Judge OKs $32 Million Settlement for Tribune Employees in the Defunked ESOP

by Jim Romenesko

A federal judge has granted preliminary approval of the $32 million settlement — announced in August — for former Los Angeles Times auto writer Dan Neil and Tribune employees. The final hearing is set for January 30. The plaintiffs contended that the leveraged buyout that resulted in creation of an employee ownership plan violated federal pension law. Tribune staffers became owners of the company when it was taken private by Sam Zell in 2007. The company filed for bankruptcy protection one year later.

Plaintiffs’ press release

 

FEDERAL JUDGE APPROVES $32 MILLION SETTLEMENT FOR FORMER LA TIMES PULITZER PRIZE WINNER AND EMPLOYEES OF SAM ZELL’S BANKRUPT TRIBUNE COMPANY

Hundreds Of Writers, Editors And Other Employees Will Recapture Money For Their Employee Stock Ownership Plan

 

CHICAGO – Judge Rebecca Pallmeyer of the United States District Court for the Northern District of Illinois granted preliminary approval of a $32 million settlement in the class action case of Dan Neil, et al. v. Samuel Zell, et al. The defendants in this case are GreatBanc Trust Company, Samuel Zell and EGI-TRB, LLC. Tribune Company was dropped from the case after its bankruptcy filing, but they are a party to the settlement. The Tribune Company includes the Chicago Tribune, the Los Angeles Times, the Baltimore Sun, other major newspaper and media outlets. The final hearing on the settlement is on January 30, 2012.

The lawsuit, which was filed in November 2008 following the purchase of the Tribune Co. by Sam Zell and his company, raised claims on behalf of participants and beneficiaries of the Tribune Company Employee Stock Ownership Plan (ESOP). 

The lawsuit challenged the Leveraged ESOP buy-out of the company. The complaint alleged Defendants breached their fiduciary duties by causing the ESOP to pay more than fair market value for the Tribune stock purchased in April, 2007 by Sam Zell. 

Also alleged was that Defendants caused the ESOP to purchase unregistered stock at a time when the Tribune stock was trading on the public market and engaged in prohibited transactions under ERISA. 

The U.S. Department of Labor commenced an investigation of the Leveraged ESOP Transaction and asserted claims against Tribune which were also raised. 

Under the terms of the settlement, Tribune and GreatBanc will collectively pay the settlement amount of $32 million to the employees in the ESOP. The suit was handled by Cotchett, Pitre & McCarthy of Burlingame, Meites, Mulder & Glink of Chicago, and Lewis, Fineberg, et al., of Oakland. 

The lead plaintiffs were Dan Neil, a Pulitzer Prize winning journalist formerly with the Los Angeles Times, and Eric Bailey, also a former Los Angeles Times journalist. Hundreds of writers, editors and other employees will recapture money for their ESOP.

Phil Gregory of Cotchett, Pitre & McCarthy, LLP said, “This is a wonderful vindication for all the newspaper people who dedicate their careers to journalism only to have their retirement plans diminished by unscrupulous purchasers of their papers.”

The Case is Dan Neil, et al. v. Sam Zell, et al. (08-cv-06833) ND. ILL.

The November 2011 Edition of the IATSE ORGANIZER now available

Bonuses Worthy of Protest for Gannett and Tribune Executives

Why Not Occupy Newsrooms? By DAVID CARR

Almost two weeks ago, USA Today put its finger on why the Occupy Wall Street protests continued to gain traction. The bonus system has gone beyond a means of rewarding talent and is now Wall Street’s primary business,” the newspaper editorial stated, adding: “Institutions take huge gambles because the short-term returns are a rationale for their rich payouts. But even when the consequences of their risky behavior come back to haunt them, they still pay huge bonuses.” 

Well thought and well put, but for one thing: If you were looking for bonus excess despite miserable operations, the best recent example I can think of is Gannett, which owns USA Today. 

The week before the editorial ran, Craig A. Dubow resigned as Gannett’s chief executive. His short six-year tenure was, by most accounts, a disaster. Gannett’s stock price declined to about $10 a share from a high of $75 the day after he took over; the number of employees at Gannett plummeted to 32,000 from about 52,000, resulting in a remarkable diminution in journalistic boots on the ground at the 82 newspapers the company owns. 

Never a standout in journalism performance, the company strip-mined its newspapers in search of earnings, leaving many communities with far less original, serious reporting.

Given that legacy, it was about time Mr. Dubow was shown the door, right? Not in the current world we live in. Not only did Mr. Dubow retire under his own power because of health reasons, he got a mash note from Marjorie Magner, a member of Gannett’s board, who said without irony that “Craig championed our consumers and their ever-changing needs for news and information.” 

But the board gave him far more than undeserved plaudits. Mr. Dubow walked out the door with just under $37.1 million in retirement, health and disability benefits. That comes on top of a combined $16 million in salary and bonuses in the last two years. 

And in case you thought they were paying up just to get rid of a certain way of doing business — slicing and dicing their way to quarterly profits — Mr. Dubow was replaced by Gracia C. Martore, the company’s president and chief operating officer. She was Mr. Dubow’s steady accomplice in working the cost side of the business, without finding much in the way of new revenue. She has already pocketed millions in bonuses and will now be in line for even more.

Forget about occupying Wall Street; maybe it’s time to start occupying Main Street, a place Gannett has bled dry by offering less and less news while dumping and furloughing journalists in seemingly every quarter. 

It’s tempting to write off Gannett’s enrichment amid the ruins as anomalous. 

But Gannett is not the only big media enterprise where the consequences of bad decisions land on everyone except those who made them. The Tribune Company, a chain of newspapers and television stations run into the ground by Sam Zell after he bought it in 2007, is paying out tens of millions of dollars in bonuses as part of a deal in which it would exit bankruptcy.

Over 4,000 people in the company lost their jobs, and the journalistic missions of formerly robust newspapers it operates — including The Los Angeles Times, The Chicago Tribune and The Baltimore Sun — have been curtailed. And even though Randy Michaels and some of his corporate fraternity brothers who operated the company into bankruptcy are gone, more than 600 managers who were there while the company cratered remain. 

Not only do they have jobs while so many others were sent packing, but the remaining leadership will be eligible for a bonus pool from $26.4 million to $32.4 million under the current plan. 

Through the magic of blunt force cost-cutting — about $800 million over the last three years, much of it in the form of layoffs — a lawyer for the senior creditors told the judge in charge of the bankruptcy case that the bankrupt enterprise would generate an estimated $517 million in cash flow for 2011.

Over the past three years, counting the payment scheduled for 2011, the bonuses could amount to $115 million, according to The Chicago Tribune. The drawn-out legal process hasn’t stopped lawyers and the current managers from picking the carcass clean. The Tribune story includes over leveraged purchases, feckless management and a culture of personal enrichment, all hallmarks of the Wall Street way that have left protesters enraged. 

This is a not a finger-waving screed to suggest that some layoffs are more damaging than others just because they landed on people like me who type for a living. 

(It’s worth noting that Arthur Sulzberger Jr., the publisher and chairman of The New York Times Company, and Janet Robinson, the president and chief executive, were criticized by various unions for a 2009 compensation package that cost a combined $12 million. It’s also worth noting that Mr. Sulzberger chose to forgo additional compensation in other years.) 

The newspaper business is struggling, and those of us who have jobs are lucky to still have them. But how in the world could a board, any board, justify such huge payouts to media executives at a time like this? It’s not that any of them were flight risks, in need of incentive to stick out a bankruptcy. Most had no place to go, and even if they did, many would have trouble shaking off the taint of their previous tenure.

Peter Lewis, a former employee of both The Times and The Des Moines Register, which was bought and diminished by Gannett after he left the paper, ripped the Gannett bonuses on his blog “Words and Ideas” in summarizing an approach in which getting rid of jobs passes for a strategy. 

“Can anyone argue that Gannett newspapers and journalism are better today, and that news consumers are better served?” he wrote.

“How did Mr. Dubow and Gannett serve the consumer?” Mr. Lewis continued. “They laid off journalists. They cut the pay of those who remained, while demanding that they work longer hours. They closed news bureaus. They slashed newsroom budgets. As revenue fell, and stock prices tanked, and product quality deteriorated, they rewarded themselves with huge pay raises and bonuses.”

Sure, he was talking about Gannett, but he could have been talking about the Tribune Company, or come to think of it, much of the American economy that used to make money by making things. Many newspaper companies are working hard against steep challenges to innovate into a new future, but Mr. Dubow and his team seemed content to just ride the collapse of the business. 

No one, least of all me, is suggesting that running a newspaper company is a piece of cake. But the people in the industry who are content to slide people out of the back of the truck until it runs out of gas not only don’t deserve tens of millions in bonuses, they don’t deserve jobs. 

The optics of the bonuses are far worse than the practical impact. Newspapers are asking their employees for shared sacrifice and their digital readers to begin paying. So, lucrative packages won’t cut it. As newspapers all over the country struggle to divine the meaning of the Occupy protests, some of the companies that own them might want to listen closely to see if there is a message there meant for them.

Entertainment Unions Join Occupy Wall Street

On Wednesday, Members of labor unions joined the Occupy Wall Street protest in force. More than 6,000 union members rallied at Foley Square before marching down to Wall Street.

Local One Member Bob Daraio with Local 52 Member Eric Gerrity

IATSE Local One stagehands; Studio Mechanics from IATSE Local 52; Camera Operators from IATSE Local 600; Wardrobe crews from IATSE Local 764; FOX5 Broadcast Engineers from IATSE Local 798; and Designers from IATSE Local 829 marched along with Broadcast Engineers from IBEW Local 1212 and NABET-CWA Locals 11 and 16; WGAE Writers; Actors from SAG, AFTRA, AEA, and Musicians from Local 802.

Allison Kilkenny The Nation

 

Thousands of protesters gathered in Foley Square today as part of Occupy Wall Street’s largest event to date. Unions from the Transport Workers Union, SEIU 1199, and the United Federation of Teachers all joined the protest to voice their discontent at what they call a bailout of Wall Street, while working-class people are left to suffer under a system of austerity.

Ayman El-Sayed, a member of the nurses union, said he came to the protest to stand in solidarity with the Liberty Plaza activists.  El-Sayed is having difficulty finding steady work in New York City, but he still tries to protest in between job-hunting.

“I come before work, I come after work when I can, but I find this Occupy Wall Street movement is important because it will help future workers: better benefits, get better jobs, get more stability, and not be neglected by their government, which bails out banks instead of bailing out workers.”

El-Sayed mentions the negative consequences of the city’s budget cuts, including the closing of the 400-bed St. Vincent Catholic Medical Centers, which sealed its doors back in April.

“I wanted to be a nurse to contribute to my community, so I could pay my mortgage, pay my bills, raise my kids, but also help people and help my community,” he explains before addressing the media’s negative depiction of some of the protesters as pot-smoking hippies engaging in an endless drum circle.

“God bless these youth who are out here, because while I’m at work, they can hold it down till I can get off work and come down and stand with them. Everybody plays a role. Even if some of them are hippies, they’re Americans. They have a right to speak their opinion. I don’t care how they dress or what they do,” he says.

 El-Sayed mentions he doesn’t believe either political party represents his interests, or “normal working people’s interests.” In fact, he’d like to see an independent movement grow from OWS. “I believe in third parties. I just hope we can build something out of this movement here—an alternative to the two-party system”

Witnessing OWS’s evolution over the course of only a few weeks is truly something to behold. In the first few days of the movement, it was extremely difficult to find accurate information about what the protesters stood for, or what was planned for the movement that day, let alone over the span of a longer arc. Now, Liberty Plaza is neatly divided into sections: the greeting desk where you can see the day’s schedule; the supply drop-off area where supporters can leave clean blankets, sleeping bags, and clothing; and then there’s the food and media centers. The group even has a press team that mingles during events to address any questions the media might have.

OWS also has its own newspaper now, the Occupy Wall Street Journal, available as a .pdf file here, though some observers have criticized the publication for its almost entirely male perspective.

While many unions attended the event in an official capacity, I ran into a couple young men who attended the protest sporting their union gear, even though their own local hadn’t voted to officially throw their weight behind OWS.

As members of the International Brotherhood of Electrical Workers, William and Carlos wanted to stand in solidarity with the young people of Liberty Plaza even as their union leaders drag their feet. William declared his intention to do so because to do anything but come down to the protest would be “complete cowardice.”

“We believe the union movement should be more involved in this protest,” William says. “We’re out here to show a lot of us are grassroots, democratically minded, and we do want to bring a union face to this movement.”

William blames a certain degree of anti-protest fervor among union members on an inflated sense of machismo. According to him, ever since Vietnam, when hard hats flooded the streets for the sole purpose of beating up young protesting college students, unions have sometimes adopted a sense of hostility toward activist youths.

“There’s always been this macho culture,” he says, “but I think there’s a more progressive slant moving into the union right now. At least, the people I’ve spoken with on my job support what I’m doing. Not all of them took the pay cut to come here.” (William had to leave work three hours early and had to sacrifice the remainder of his day’s wages to do so).

Carlos’s boss asked him if he was going to “join the hippies” when he announced his intent to join OWS. “I was like, no, we’re part of the 99 percent. If you have any kind of debt whatsoever, you’re part of the 99 percent.”

William nods in agreement. “I consider myself a patriotic person, and this is a patriotic protest…. [The protesters are] not anti-America. They’re trying to save America.”

“It’s like a generation is calling and you’re not gonna answer it?” Carlos asks a hypothetical naysayer, sitting on the couch at home. “That’s all I have to say.”

Mark Mannis, Marge Harrison and Helene Mannis, three retired schoolteachers, stand together at Foley Square, the end point of the OWS march. Mark used to teach in Queens, and says he came to the protest to support young people. “In our generation, things have been very good to us. We’re union members. Everything we are today is because we’re union members, and kids don’t have any possibility to progress at all,” he says.

His companion, Marge, is a retired schoolteacher from Nassau County, and she came to take part in the infectious spirit of the movement.

“I’m just so thrilled that the young people in the occupation have just sent an electric jolt of optimism through people who have been organizing for years around Afghanistan, Iraq, the budget, the deficit, all these issues that we’re confronting,” she says, adding that the right to collectively bargain is an essential right because without it, “you’re just flailing around.”

Helene chimes in that she agrees. “I’ve been waiting for the young people to finally rise up and really realize how the right wing is destroying this country, and all the dreams that people had for having a great America and caring about other people, and doing what’s right: taking care of the weaker. Not just taking care of the rich and powerful and the rest of us just get the crumbs on the floor.”

Various right-wing websites have depicted the unions’ decisions to join OWS as a sign that the traditional vehicle of the left, labor, plans to hijack the movement to implement their dastardly plan of ensuring pension plans and healthcare for all workers.

However, OWS organizers don’t see that nefarious plan as being possible, or even, you know, real.

Jeff Smith, an OWS organizer, seemed confused at the idea. “I don’t think there’s any chance of that, frankly,” he says.

A member of the press team for Occupy Wall Street, Mark Bray, agrees. “If you just look at it logistically, you look at where we’re set up, you look at the park, you look at what we actually do on a day-by-day basis with the General Assemblies, I don’t know how they would do that,” he says. “They’re using Occupy Wall Street as a means to get their message out and we welcome that.”

Bankruptcy Judge Lets Tribune Co. Make Lofty Executive Bonus Payments, Again!

By: John Clark

In a move that is sure to draw the ire of the Tribune Company’s critics, a bankruptcy judge in Delaware recently allowed Tribune Co. to distribute millions of dollars in bonuses to its top managers. 

According to a report in the Washington Post, Tribune Co. justified its lavish bonuses by saying it needed to compensate its top employees for their efforts in keeping the company afloat while it trudged through bankruptcy proceedings. 

The giant media company, which owns several newspapers, including the Chicago Tribune and the Los Angeles Times, faced a financial catastrophe in recent years as a shift in the media landscape undercut newspapers' traditional revenue streams. 

With more content available for free or at little cost on the Internet, traditional newspapers have scrambled to compete with low-cost information sources.

In addition, the recent decrease in newspaper readership has led to a loss in advertisement, which has crippled the finances of major metropolitan newspapers like the Chicago Tribune. 

In the midst of this financial crisis, the Tribune Co. filed for bankruptcy in 2008, shortly after a buyout of the company led by Sam Zell left Tribune Co. drowning in debt. 

 

The newspaper company has been shedding jobs at a rapid pace over the past few years, which makes the recent round of bonuses a bit controversial, observers say. 

Under the plan approved by the bankruptcy judge, Tribune Co. plans to distribute tens of millions of dollars to a few hundred top managers, provided that they meet certain performance objectives. 

In the meantime, the bankruptcy court is weighing the merits of the company's proposed reorganization plan, which would likely shield it from payment demands by numerous creditors. 

Critics of the proposed plan claim that the current reorganization plan would needlessly protect the lenders that funded the ill-conceived buyout of the company in 2008. Tribune Co.'s poorly timed bonus payments have only added to the frustrations shared by former employees of the company. 

Thus, while the payment of bonuses during bankruptcy does not violate any bankruptcy law, it certainly hasn't helped the company's reputation in the court of public opinion.

The management incentive plan calls for some 640 employees to share $16 million to $42 million if they hit certain financial targets.

Despite continued under-performance in the publishing unit, Tribune Co. management is projecting it will be able to generate about $517 million in cash flow in 2011, $20 million more than originally projected

Tribune Settles $37.5 Mill Tax Claim Related to 2007 Leveraged Buyout For $ 7 Mill

By Steven Church

Bloomberg Business Week

Tribune Co., the biggest media company in bankruptcy, agreed to pay the Internal Revenue Service $7 million to settle allegations that the company’s 2007 leveraged buyout violated U.S. tax law. 

The settlement ends a fight over whether the company must pay $37.5 million to the IRS, which alleged that the company owed unpaid taxes related to its almost $13 billion leveraged buyout.

The deal “resolves a major outstanding claim against Tribune on very favorable terms to the debtors,” the company said in court papers filed today in U.S. Bankruptcy Court in Wilmington, Delaware. 

Tribune filed for bankruptcy in 2008, one year after billionaire Sam Zell led a buyout that added more than $8 billion in debt onto the Chicago-based company. Tribune owns newspapers including the Los Angeles Times the Chicago Tribune, along with television and radio stations.

Two groups of hedge funds are waiting for U.S. Bankruptcy Judge Kevin J. Carey to pick one of two competing plans to reorganize the company so it can leave bankruptcy. 

The IRS claim was related to the structure of the deal, which was designed to avoid some federal taxes. 

The bankruptcy case is In re Tribune Co., 08-bk-13141, U.S. Bankruptcy Court, District of Delaware (Wilmington). 

--Editors: Mary Romano, Michael Hytha 

To contact the reporter on this story: Steven Church in Wilmington at schurch3@bloomberg.net 

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net