Tuesday, November 30, 2010

Tribune Bankruptcy Judge Asks Firms to Revise Competing Reorg Plans

(Reuters) — Creditors of bankrupt Tribune Co. will have to wait a little longer before they get their say about the best way to end the sprawling media company's two-year stay in Chapter 11.

A bankruptcy judge on Monday sent back for a rewrite some of the hundreds of pages of documents that describe four competing plans for repaying the debts of the owner of the Los Angeles Times and Chicago Tribune.

Once those changes are in place in the coming days, the judge, Kevin Carey, said on Monday he will consider them again for approval on Dec. 6, 2010.

Approval would clear the way for creditors to vote on the plans.

The creditors, including hedge funds, suppliers, tax collectors and landlords, have been waiting to be paid since December 2008, when the owner of newspapers and about 20 television stations filed for bankruptcy.

Tribune's dash into court protection from creditors came a year after real estate developer Sam Zell bought the company with about $8 billion of debt.

Bankrupt companies usually ask creditors to vote on just one plan for repaying debts, but Tribune's creditors will be asked to vote on an unprecedented four competing plans.

"There are more plans in this case than I have ever seen in my life," David LeMay, who represents the official committee of unsecured creditors in the case, said in court on Monday. The Chadbourne & Parke attorney called the case a "four-ring circus."

The situation has arisen from deep divisions over how to deal with legal claims stemming from Zell's buyout and the company's bankruptcy, which wiped out roughly $2 billion of the Tribune bonds that were issued prior to Zell's buyout.

The company has teamed up with lenders JPMorgan Chase & Co. and hedge funds Angelo, Gordon & Co LP and Oaktree Capital Management LP to back a plan that settles some of the biggest legal claims in exchange for giving $420 million to bondholders.

Bondholders led by the Aurelius Capital Management hedge fund have proposed putting those claims at the center of their all-out litigation plan which they say could be worth billions.

Monday's hearing pitted Aurelius and its demands for more disclosure about the holdings of JPMorgan and its allies against the backers of the company's plan.

Bondholders will not be paid until the company pays off the billions in loans used to fund Zell's deal. As the loans are worth more than the company, that leaves nothing for the bondholders unless they can prove the loans essentially rendered the company insolvent. If proven, that puts billions of dollars of loan claims at the back of the line for repayment.

Creditors will have the choice to vote for all four plans or against all four -- or something in between. Their votes will help determine which plans are confirmable. A plan is confirmable generally if it has creditor support and meets various standards under the bankruptcy code.

If more than one plan is determined to be confirmable, the judge may have to pick a winning plan after hearings on the issue that are scheduled for March.

Bondholders were emboldened earlier this year when a court-appointed examiner determined that $3.6 billion of the amount Zell borrowed to buy Tribune could be successfully attacked in court as a "fraudulent transfer." Such a ruling would put those claims at the back of the line for repayment.

Creditors Seek to Recover Tribune Payments to Lawyers andConsultants

By SEAN KELLY - Courthouse News Service

WILMINGTON, Del. (CN) - Creditors of the Tribune Co. seek to recover more than $18 million in payments the company made to lawyers, advisers and other professionals who helped it file for bankruptcy in 2008. The official committee of unsecured creditors asked federal bankruptcy Judge Kevin Carey for permission "to commence, prosecute and settle" recovery actions on the company's behalf.

     The firms that received payments include Sidley Austin LLP, Tribune's lead attorney in its bankruptcy proceedings, and PricewaterhouseCoopers, the company's financial adviser in 2008. The committee wants Judge Carey to grant it the authority to either toll recovery actions or "to commence, prosecute and settle" claims against the firms that received payments from Tribune within 90 days of its bankruptcy petition.

     Tribune has not yet consented to the committee's standing to recover the money, according to the creditor's motion. Because of inherent conflicts, Tribune would not be able to sue its own lawyers to recover the payments it made to them, the motion states.

     This would be the third adversary lawsuit brought by the committee of unsecured creditors against the so-called "preference defendants." The first proceeding was filed against the banks, lenders and advisers who participated or benefitted from the 2007 leveraged buyout of Tribune. The second proceeding was filed against Sam Zell and Tribune's management, directors, officers and shareholders who benefitted from the buyout.

     On Tuesday, Judge Carey authorized the release of an unredacted version of the adversary complaint against key players in the 2007 leveraged buyout that left the company crippled with debt. The impetus for the lawsuits came from a report filed by a court-appointed bankruptcy examiner in July, finding evidence that the leveraged buyout might have been a fraudulent conveyance and that creditors might be able to recover billions of dollars through litigation.

     Carey also tried to get the four disparate groups that are filing bankruptcy exit plans to release a single disclosure statement, which will be sent to creditors for a vote. He said the statement "oughtn't to be a herculean effort" to put a single plan together instead of four, and told the groups that he might write the document himself.

     The judge also scheduled a hearing for March 7, 2011 to decide which of the four bankruptcy plans to approve.

Tribune, owner of the Los Angeles Times and Chicago Tribune, is nearing the end of its two-year bankruptcy stay, which is set to expire in December.

     The motion was filed by Adam Landis of Landis Rath & Cobb LLP and Graem Bush of Zuckerman Spaeder LLP.

Judge in Tribune Co. Bankruptcy Being Pushed to His Limits

By Michael Oneal, Tribune reporter

Senior noteholders led by Aurelius Capital Management have proposed an alternative plan that would preserve legal claims related to the buyout. It would offer creditors some money now but reserve much of Tribune's enterprise value in a litigation trust that would be used to pursue the lawsuits, which could result in significant recoveries for creditors.

Another plan is proposed by King Street Acquisition Co. and other holders of $1.6 billion in unsecured bridge loans used in the second stage of the buyout, the phase the examiner found most troubling. That plan would allow the settlement of legal claims against senior lenders and bridge lenders while allowing lawsuits to proceed against other parties, including Zell and Tribune officers and directors.

The fourth plan was submitted by senior lenders who financed the first step of the buyout, in which the examiner found no wrongdoing. It would preserve the right to sue banks that financed the final stage of the buyout at a time when the examiner said it seemed clear that Tribune would have trouble repaying the resulting debt.

The judge in Tribune Co.'s nearly 2-year-old bankruptcy case struggled openly at a key hearing Monday as he attempted to referee what one participant described as a "four-ring circus" and another called "total chaos."

Faced with a proceeding that has splintered into four competing restructuring plans brought by sparring creditor factions, U.S. Bankruptcy Judge Kevin Carey acknowledged that moving the complex case forward efficiently is taxing the powers of the bench.

"It's an unwanted meeting with my own limitations," he said at one particularly frustrating juncture during a seven-hour hearing in a bankruptcy courtroom filled to capacity with lawyers representing constituents in the Chicago-based media company's Chapter 11 case.

Experts say the Tribune Co. case is developing into Exhibit A for how bankruptcy law has evolved since 2005, when Congress mandated a limit for how long a court could grant debtors the exclusive right to file their own restructuring plan.

The logic behind the change was that it would speed up ever-more complex cases by giving competing creditors the chance to file their own plans if the debtor failed to do so after 18 months. But since Tribune Co.'s exclusivity ran out in August, hedge funds and other investors that have bought up claims have filed three competing plans. Most participants agree the added complexity and litigiousness have bogged down an already plodding case.

Monday's hearing in Delaware was an attempt to resolve differences between the four different groups of plan proponents over the language contained in their so-called disclosure statements, documents that describe the architecture of a given restructuring plan and what kind of recovery it promises for various classes of creditors.

That is difficult enough in a regular case with a single restructuring plan. But the challenge is exponentially greater with four plans, bankruptcy experts said, since objections mount and the openings for new legal challenges multiply.

Carey did resolve a long list of objections to the various plans, including granting a request from Tribune Co. Chairman Sam Zell. The Chicago real estate magnate had asked that the various plan documents contain language pointing out that an independent examiner in the case said it was unlikely that Zell could be found liable for charges stemming from the collapsed 2007 leveraged buyout of the company, which owns the Chicago Tribune, Los Angeles Times and other media properties.

The plans already point out that Zell is nonetheless vulnerable to litigation.

But Carey failed to accomplish another goal: figuring out how to present the plans to creditors large and small in a way that is comprehensible. The parties have agreed to create one common disclosure statement and then to append smaller, individualized documents describing the four plans. Carey complained that the resulting package has grown to more than 400 pages, not including attachments and exhibits.

"I'm disappointed I can't reach out and grab it myself," Carey said after abandoning an idea to edit down the documents personally. "There's just so much to wade through."

The Tribune Co. case has also presented Carey with another challenge: How to deal with statements accompanying the plans that forcefully advocate for various creditor positions.

The statement accompanying a plan put forward by Aurelius Capital Management, for instance, includes a letter from the firm's chairman, Mark Brodsky, that quotes from philosopher Edmund Burke and the fund's namesake, Marcus Aurelius, about the virtue of triumphing over evil. It talks about management "cover-ups" and holding competing creditors accountable for "wrongdoing." Other parties also dialed up the rhetoric in pitching their plans.

Acknowledging that plan proponents should have some ability to sell their plans to other creditors, Carey sought to halt the rhetorical arms race. He encouraged the parties to edit the statements to make them more appropriate, and he promised to go over them line by line to make sure they are not misleading to creditors.
He also said he would include a statement in the vote-solicitation packages explaining what the court endorses and what it doesn't. Once those packages go out, creditors will vote on the plans, which will then be considered by the judge at confirmation hearings in March.

Carey dispensed with other business at the hearing. He approved two standing motions brought earlier by the Official Committee of Unsecured Creditors reserving the right to pursue more than $200 million in prepetition claims against Tribune Co. managers and other insiders, as well as professionals that helped with the leveraged buyout and bankruptcy.

But he put off until next week the next big challenge: Deciding on a complex set of voting procedures for the case and resolving rules for how plan opponents can take discovery as they prepare for the confirmation hearings.


Unions, Progressives Blast Administration For Pay Freeze Proposal

Huffington Post, The


WASHINGTON -- The Obama administration's decision to support a two-year pay freeze on federal employees is sparking yet another wave of angst and eyebrow raising among progressives.
The critics are the expected -- mainly progressive economists and union officials. And in addition to condemning the president's position on both policy and morality grounds, the question they're asking in private is, what exactly did the White House get in return for the chip it gave away?

"Today's announcement of a two-year pay freeze for federal workers is bad for the middle class, bad for the economy and bad for business," said AFL-CIO President Richard Trumka. "No one is served by our government participating in a 'race to the bottom' in wages. We need to invest in creating jobs, not undermining the ones we have. The president talked about the need for shared sacrifice, but there's nothing shared about Wall Street and CEOs making record profits and bonuses while working people bear the brunt. It is time to get our nation back on track, but we should not do so by placing an even greater burden on the middle class."

"This proposal to freeze federal pay is a superficial, panicked reaction to the deficit commission report," stated AFGE National President John Gage. "This pay freeze amounts to nothing more than political public relations. This is no time for scapegoating. The American people didn't vote to stick it to a VA nursing assistant making $28,000 a year or a border patrol agent earning $34,000 per year.

"President Obama asks federal workers to share the sacrifice, but it's unconscionable for him to attack the wages of federal working people while the millionaires and billionaires on Wall Street not only get their bailouts and astronomical bonuses; they also get their tax cuts," concluded Gage.

"It makes no sense to single them out for wage freezes at this time," said Tamara Draut, vice president of policy and programs at Demos.

Greg Anrig, vice president of programs at The Century Foundation said the move reinforced the concern that the focus of political debate in Washington is shifting from jobs to deficit reduction and fiscal austerity. "It's far to soon to be doing that," he said.

Sam Stein 
stein@huffingtonpost.com | HuffPost Reporting 
Unions, Progressives Blast Administration For Pay Freeze Proposal

Tribune Judge May Rewrite Reorganization Documents

By Steven Church

Bloomberg Bussiness Week

Nov. 29 (Bloomberg) -- Tribune Co.’s bankruptcy judge threatened to take over drafting reorganization documents for the publisher unless four groups of creditors stop bickering over wording in the materials.

U.S. Bankruptcy Judge Kevin J. Carey in Wilmington, Delaware, told warring groups of banks, hedge funds and other investors that he may rewrite their disclosure statements for the company’s four competing reorganization plans.

“I will do it myself if we can’t get to a place where I’m satisfied,” Carey said at a hearing today.

The judge must approve the statements before Tribune creditors vote on the proposals. Carey will consider the votes when he holds a hearing in March to approve one of the plans.

The statements describe how each of the groups would reorganize and split ownership of the Chicago-based newspaper and television company. The documents are designed to help creditors decide how to vote.

After listening to attorneys for the groups argue for about six hours, Carey ordered them to change some of the wording in their disclosures and resubmit them later this week. He scheduled a hearing for Dec. 6 to make a final ruling about whether the proposals contain enough information to be sent to creditors for a vote.

Unsecured Creditors

Carey also gave the official committee of unsecured creditors permission to sue current and former officers of the company to claw back past payments related to bonuses and stock options. Carey also gave the committee permission to sue lawyers and financial advisors involved in the company’s bankruptcy filing to try to recover fees they were paid.

The four plans have been offered by competing hedge funds that disagree on how to resolve allegations that the company’s 2007 leveraged buyout, which added more than $8 billion to Tribune’s debt, caused the company’s bankruptcy and didn’t benefit anyone except shareholders and real estate billionaire Sam Zell, who led the buyout.

On July 27 bankruptcy examiner Kenneth N. Klee released a report that bolstered the position of lower-ranking creditors. Those creditors, including noteholders owed $1.2 billion, want JPMorgan Chase & Co. and the other buyout lenders to lose their position as first-to-be repaid because of the 2007 transaction.

Tribune owes the hedge funds, lenders and other creditors about $12 billion. Most of that debt will be wiped out under all of the reorganization proposals in exchange for stock, cash and new loans.

`JPMorgan, Oaktree

The plan proposed by Tribune is backed by JPMorgan and hedge-fund operators Angelo Gordon & Co. and Oaktree Capital Management LP. Their proposal is also backed by the majority of a panel of unsecured creditors.

Aurelius Capital Management LP, a hedge fund led by investor Mark Brodsky, is sponsoring a proposal along with other pre-buyout bondholders who are among Tribune’s lowest-ranking creditors.

A third plan is sponsored by hedge-fund manager King Street Capital LP. The fourth is backed by a dissident group of senior lenders who have broken with JPMorgan.

The bankruptcy has become a “four-ring circus,” David LeMay, an attorney for the official committee of unsecured creditors, told the judge today. “There are more plans in this case than I have ever seen in my life,” said LeMay, a partner at Chadbourne & Parke LLP in New York.

Exit From Bankruptcy

All the plans would let the company’s newspapers and television stations leave bankruptcy while lawsuits related to the buyout go forward. They differ in how $6.75 billion worth of stock, cash and a new term loan is to be divided among the creditors and lenders.

Tribune owns the Chicago Tribune and the Los Angeles Times, as well as TV and radio stations and stakes in cable channels. As part of its bankruptcy, the company sold most of its stake in the Chicago Cubs Major League Baseball team.

Under Tribune’s plan, some targets of the lawsuits, including JPMorgan, would be released from legal liability for their actions related to the buyout.

Klee concluded in his report that the second part of the two-stage buyout was an intentional fraudulent transfer because it added more debt to Tribune than it could handle and benefited only shareholders, Zell and the banks that organized the loans.

Klee found that various parties involved in the buyout acted in bad faith. Creditors are unlikely to win damages from Zell, according to the report.

Zell’s attorney, David J. Bradford, said today in court that his client, who has called the buyout “the deal from hell,” was exonerated by the Klee report.

The case is In re Tribune Co., 08-bk-13141, U.S. Bankruptcy Court, District of Delaware (Wilmington).
--Editors: Stephen Farr, Charles Carter.

To contact the reporter on this story: Steven Church in Wilmington, Delaware, at schurch3@bloomberg.net .
To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

Tuesday, November 23, 2010

IATSE Wins Big

The Biggest Winners: Crew of the reality show The Biggest Loser stand with IATSE VP Mike Miller, IATSE VP Thom Davis, Local 600 Exec. Dir. Bruce Doering, DP Vanessa Holtgrewe and Local Business Representatives after unanimously ratifying their first union contract with the show's producers on Monday morning.

We did it! Yesterday morning, the crew of The Biggest Loser voted unanimously to ratify a deal with the show's producers that includes health care contributions.

This is a huge victory for the IATSE and the courageous crew that stuck together and toughed it out on the picket line despite the staunch refusal of the producers to even negotiate at first.

On Friday, IATSE International President Matt Loeb flew in from Japan to join the picket line and get negotiations going. Over the next three days, IATSE VP Mike Miller led the union's negotiating team, which included the show's Director of Photography Vanessa Holtgrewe. Together they spent more than 40 hours bargaining with the producers, standing fast against every argument the three production companies had against signing a union contract. In the end, their determination won the day and the crew of The Biggest Loser will now have access to health insurance for themselves and their families.
Vanessa was instrumental in making this deal happen. Her leadership not only inspired the crew, she was also one of the key members of the IATSE negotiating team. "I have never seen a Director of Photography stand behind her crew with this much energy," Miller said of her. "So, Vanessa, we thank and you I'm sure your crew thanks you, too."

That kind of commitment and solidarity is what our union is all about. More than 100 Local 600 members joined our staff and the members and staff of other IATSE Locals to make this happen. Thank you to everyone who braved the cold, pre-dawn hours and the rain to spend time on the picket line. I was proud to join you. Together we made a difference. This contract sends a clear message to the industry that reality shows should and will be union work in the future. So if you are on one of these non-union shoots, email or call a business rep. We can turn these productions so that every job brings us our deserved benefits and working conditions.

HBO Contract

The Biggest Loser isn't the IATSE's only recent contract victory. Some of you have already heard that IATSE has forged a breakthrough agreement with HBO. Until these negotiations, despite its increase in productions and profits in recent years, HBO refused to pay wages that were on par with either the Basic Agreement for west-coast work or the Local Unions Majors Agreement for east-coast productions. This year, President Loeb changed that. He sat down at the table with HBO and managed to wrangle a deal that will bring HBO wages up to par with these existing deals in three years. This January, HBO will offer a 4.5 percent wage increase on the west coast and a 3.5 percent on the east coast. In January of 2012, the company will reduce the gap between its wages and the Basic Agreement/Local Unions Majors Agreement by 33 percent. In 2013, it will reduce the gap by an additional 33 percent, and by the fourth year of the deal, wages will be equal to what the other major producers pay.
Commercial Contract

Our new commercial contract also went into effect on November 1. This agreement increases producers' contributions to our health plans by at least 70 percent and gives us an immediate two percent wage increase. Commercial producers will contribute an additional $1.50 an hour towards hourly contributions this year. That figure will increase by 50 cents in 2011 and an additional $1.00 in 2012. The deal calls for commercial producers to contribute at least $3.00 an hour over the amount paid by major producers who pay residuals. The full memorandum is posted on the website.

These victories show that despite the recession, the leadership of President Loeb and the unity among IATSE Locals give us the power to better our lives. As we celebrate Thanksgiving with family and friends, I will be thankful that I am a part of this union and have thousands of Sisters and Brothers willing to fight to protect our jobs and our future.


Steven Poster, ASC
ICG Local 600 National President

Saturday, November 20, 2010

Senior Department of Labor Official: We Need Independent Labor Media

by: Dan Margolis

WASHINGTON - The mainstream media has become so biased against working people that even a federal agency can't get its message out, says a senior Department of Labor official.

President Obama's Labor Department has an impressive list of accomplishments, but most of the media doesn't bother to report on them, Carl Fillichio, Labor Secretary Hilda Solis's senior adviser for public affairs and communications, told the annual gathering of the International Labor Communications Association.

Referring to the midterm elections, Fillichio said, "Why we fared the way we did three weeks ago is because things weren't explained enough to people. There is a great need for people to get the full story."

The role of labor media is therefore all the more precious, he continued. In many cases, the only way his department can get its accomplishments known is through the independent media.

"We battle every single day when we try to put something out," he said. "The Washington Post, the New York Times, cable television" and others want to focus only on the nuts and bolts of policy issues. "Nobody is really telling the true story about how this is going to affect real people in real time in real ways."

Fillichio announced at the meeting that he had hired a staff person specifically to deal with labor media, and then proceeded to give his name, e-mail address and phone number to everyone in the audience.

The message was appropriate for the crowd. ILCA is the professional association of every newspaper published by a labor union, or about the labor movement, in the country. (The People's World is a member.)

In making his case, the official listed Labor Department accomplishments that the vast majority of Americans have never heard about.

The department has, since Solis took over, hired 720 bilingual grievance personnel, issued the largest OSHA fine in history, and, in a move unprecedented in U.S. history, completely shut down a mine because of worker fatalities.

"We believe that a worker doesn't have to die for a paycheck," the federal official said.

More than anything else, however, the biggest accomplishment of Solis's department so far, Fillichio told the crowd, was to bring it back up to pre-Bush, year 2000 standards.

"That's pathetic," he said, "but we gotta brag about that, because the previous administration brought it so low." He noted that "the previous Labor secretary, Elaine Chao, was the only Bush cabinet member who was there in the same department for eight years." He argued that over the eight years of the Bush administration, the employees and the department itself had been "de-souled."

"Here's something revolutionary," he said, speaking of the new department's accomplishments. "It was actually called 'revolutionary.' Hispanic workers are killed more than others on the job, so we held a Hispanic health and safety conference."

Fillichio is of the initiative, but said it was "ridiculous" that it could be called "revolutionary" or "historic," asking, "That was the first time an administration held such a conference?"

The Department of Labor will continue fighting for working people, he said, and will assess how to best do so given the Republican takeover of the House of Representatives. Solis and her staff will focus especially on enforcing existing labor law, he said.

"We cannot depend on those other people - the traditional media - to get that message out," Fillichio concluded.

IATSE Strike Heats Up Outside 'Biggest Loser' Set

Production crew members picket outside of King Gillette Ranch early Monday as the program's producers and replacement workers arrive on set.

Striking crew members of the NBC reality show "The Biggest Loser" continued their protest outside of the program's Calabasas set early Monday, demanding the right to join a union, receive fair wages and benefits.

100 percent of the crew signed cards asking forInternational Alliance of Theatrical Stage Employees (IATSE) representation, but the producers refused to negotiate. The crew - union and non-union alike - walked out and went on a fully-sanctioned IATSE strike. But rather than do the right thing and come to an agreement, the producers are trying to recruit scab crews through a staffing website called RealityStaff.com.

The crew walked off the set last week after producers denied them the right to sign a contract with a union so the hours they accrue would count toward health benefits and pensions.

"All we are asking for is a contract that gives us health benefits and a pension," said Paul Breakfield, who works in the show's art department. "Most of us have worked for the show for years."

Vanessa Holtgrewe, the show's director of photography, who is a union member, was protesting for her coworkers.

"We have had a fair amount of replacement crew come in, but not a ton and also some blacked out vehicles with probably some of the talent go in," she said. "The show had to get a replacement crew for wardrobe, grip electric, art, camera and makeup those are the people standing out here today."

Holtgrewe said that she is really hopeful that both parties can sit down and talk and that it would mean a lot to the crew if that were to happen.

Bill Essling, a key grip on the show, said there have not been any negotiations since last Tuesday.

"We are hoping that NBC can get on the horn and turn this thing around for us," he said. "If this show would turn and I was able to provide health care for my family, I would retire here."

IATSE Local 600 National President, Steven Poster, ASC said; "Last Monday at 4am, IATSE came out strong with a picket line to block that replacement crew. Despite the producers moving to a pre-dawn call time to avoid that line, more than 120 union members turned out in the dark to block the scabs."

President Poster continued; " TV crews, radio and reporters from all the major papers were there as well, and when the producers and about a half-dozen of the replacement crew turned up, we let them know in no uncertain terms that crossing a picket line hurts every professional in this industry. Media are reporting that one of the stars of the show, Jillian Michaels, is saying she won't cross the line. We thank her for that support. The producers are still holding out, but this IATSE picket line will continue - which means we need the support of every Local 600 member. If you have time, join the picket line even if it's only for a few hours. Our strength is in our numbers and we need to keep the pressure on and support these striking workers."

Support the striking workers of The Biggest Loser and keep the pressure on!

For more information, go to www.cameraguild.com

Friday, November 19, 2010

Comcast-NBCU Structure Made Official

By Jon Lafayette -- Broadcasting & Cable

Comcast announced the new executive lineup that will run NBC Universal when its acquisition is finally approved.

The lineup includes a few new faces, in addition to current NBC and Comcast executives who will be reporting to Steve Burke, the Comcast COO who will become CEO of NBC Universal.

Key newcomers to the company include Bob Greenblatt, formerly with Showtime, who becomes chairman of NBC Entertainment and will be responsible for trying to revive the Peacock network's struggling primetime lineup; Pat Fili-Krushel, formerly with Time Warner and ABC, who becomes executive VP of NBC Universal; and Adam Miller, formerly with PR firm Abernathy MacGregor Group, who will be executive VP, corporate affairs.

Previously, Jeff Zucker, now NBCU's CEO, Jeff Gaspin, president of NBC Universal Television, and communication chief Allison Gollust said they were leaving the company. Advertising president Mike Pilot will also be leaving the company.

In a memo, Burke said "we are beginning our leadership announcements now because with the anticipated close of the deal nearing, we want to give everyone enough time to begin to think about the specific opportunities and challenges they will face beginning the day of the close."

Burke added: "This is particularly true for areas that have transition work to complete before we close. While new roles won't be effective until the deal closes, and while there will be more announcements to come, it is important that we are prepared to hit the ground running."

Former NBC execs reporting directly to Burke are: cable programming executives Bonnie Hammer and Lauren Zalaznick, NBC News/MSNBC President Steve Capus; CNBC President Mark Hoffman; Dick Ebersol, who become chairman of the NBC Sports Group; Ron Meyer, president of COO of Universal Studios; Lynn Calpeter executive VP and CFO; General Counsel Rick Cotton and Paula Madison, executive VP for diversity.

Former Comcast execs reporting to Burke are: Ted Harbert, who becomes chairman of NBC Broadcasting; Matt Bond, who becomes executive VP, content distribution; Jeff Shell, who becomes chairman of NBC Universal International and Page Thompson, who becomes executive VP, strategic integration responsible for identifying possible synergies between Comcast, NBC, Universal Studios and Parks and the cable channels.

At NBC Entertainment, Marc Graboff and Angela Bromstad will be reporting to Greenblatt.

At NBC Broadcasting, Harbert will be responsible for broadcast advertising sales and affiliate relations. Syndication boss Barry Wallach, digital head Vivi Zigler and station group topper John Wallace will report to Harbert.

In cable programming, Hammer and Zalaznick, portrayed as dueling divas even before the Comcast deal was announced, both have added duties. Hammer , who becomes chairman, NBC Universal Cable Entertainment and Cable Studios, will be responsible for USA, Syfy, E! Entertainment, G4, Chiller, Sleuth, Universal HD and UCP (Universal Cable Productions). Neil Tiles remains President of G4, reporting to Hammer, who will be hiring a new president for E! Entertainment to succeed Harbert.

Zalaznick, named Chairman, NBC Universal Entertainment & Digital Networks and Integrated Media, will continue to oversee Bravo, Oxygen, iVillage and the Integrated Strategic Marketing Group, and digital properties Daily Candy and Fandango, Spanish language broadcaster Telemundo, and cable networks mun2 and Style. Joint venture PBS Sprout will also report to Zalaznick. Reporting to Zalaznick will be Telemundo president Don Browne (Jackie Hernandez continues as chief operating officer of Telemundo), Salaam Coleman Smith of Style and Chuck Davis of Fandango and Daily Candy.

In advertising, responsibility for broadcast and cable have been divided. Marianne Gambelli, who had been president of advertising for NBC, becomes President, NBC Network Advertising sales and reports to Harbert. Dave Cassaro, who had been president of ad sales for Comcast Networks, becomes president cable advertising sales and will report to Hammer and Zalaznick. Reporting to Cassaro are Steve Mandala, Peter Naylor and Mike Rodriguez. Both broadcast and cable sales had previously reported to Pilot.

In Sports, Ebersol will have NBC Sports, The Golf Channel, Versus and the Comcast Regional Sports Networks, with RSN chief Jon Litner, Versus president Jamie Davis and the Golf Channel's Earl Marshall reporting to him.

In distribution, NBCU execs Bridget Baker and JB Perrette will report to Bond.

In administration, Fili-Krushel's responsibilities will include business strategy, human resources, legal and Media Works. Reporting to her are Salil Mehta, who continues as president of business operations, strategy and development for NBC, and John Eck, president of Media Works General Counsel Rick Cotton, will report to Fili-Krushel as well as Burke.

Also Ed Swindler, who had been COO of ad sales, will report to CFO Calpeter and be involved in company-wide sales efforts.

"The team described above will not begin to operate the company until after the transaction closes, which will occur following regulatory approval," Burke said in his memo. "Between now and then, each business will continue to be managed by its respective leadership team, and NBC Universal will continue to be led by Jeff Zucker, whose talent, hard work and commitment have been instrumental in building NBC Universal into the company it is today."

Deal Critics Call Comcast NBCU Pre Merger Staff Moves Premature

Some groups critical of the proposed Comcast/NBC Universal joint venture are also criticizing pre-merger personnel moves by the two companies in anticipation that the deal will be approved by regulators.

The first big move after the naming of Steve Burke to succeed Jeff Zucker at NBC Universal came Monday with the official word, from NBC Universal TV group head Jeff Gaspin himself, that Burke had indicated he wanted to go in a different direction and Gaspin would be exiting "a short time after the merger."

Asked before the Gaspin announcement about their reaction in general to pre-merger moves by Comcast's Burke, a couple of public interest group representatives signaled they thought it was premature.

"It seems a bit hasty for Comcast to start measuring the drapes given that it has not yet won approval to acquire NBCU from either the DOJ or the FCC," said Free Press Policy Counsel Corie Wright. "It is especially premature given that, by all accounts, both those agencies appear to have significant concerns about the deal, including the combined-company's ability to squash emerging competition in the online video market."

"Our view is that merger applicants make personnel changes like this at their peril," said Public Knowledge spokesman Art Brodsky, "and these changes shouldn't be used to try to force the Commission to alter its review process.... We wouldn't want the commission to speed up its processes, for example, based on the idea that personnel changes are being made."

A source familiar with Comcast's moves said it was pretty common to announce a leadership team before a deal closes so it would be ready to go, adding that was particularly the case in creative industries so that people outside the company will know who they need to be dealing with when contracts come up for renewal or pilots need to be greenlighted.

Burke is slated to become the CEO of NBCU if and when the deal is approved by regulators. Even some deal critics have suggested the $30 billion joint venture is likely to be approved, though also likely with conditions -- either codifying what the two companies have promised in public interest commitments and side deals with various groups, adding the governments own conditions on access to programming, competition, and perhaps online content, or some combination of the two.

The FCC review process has an informal end date of nine days from today (Nov. 15), but that is according to its unofficial shot clock, which the FCC has overshot on numerous occasions.

Various industry deal-watchers are looking for something from the Department of Justice in early December, followed in short order by the FCC's decision. Justice looks at competition in terms of antitrust issues, while the FCC looks more broadly at the impact of the deal both on the competitive marketplace and the public interest.

IBEW Makes Hollywood Magic

Behind the scenes at Hollywood's hottest movie studios are the men and women of International Brotherhood of Electrical Workers (IBEW), who help make cinema magic every day.

Alexander Hogan

Communications Specialist
Media Department
International Brotherhood of Electrical Workers
900 Seventh Street, N.W.
Washington, D.C. 20001

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Wednesday, November 17, 2010

Republican Senators Confirm Their Position That Women Don't Deserve Equal Pay For Equal Work

Steve Benen  wrote in The Washington monthly; the first bill President Obama signed after taking office was the Lilly Ledbetter Fair Pay Act, which made it easier for women to seek justice for pay discrimination. At the time, Sens. Susan Collins (R-ME), Kay Bailey Hutchison (R-TX) and Olympia Snowe (R-ME) joined with Democrats to overcome strong Republican opposition to the bill. But today, every Republican senator voted against a motion to proceed on the  Paycheck Fairness Act, a bill that "would further strengthen current laws against gender-based wage discrimination."

Women earn barely three-quarters of what their male counterparts make for the same work, but Republicans have invented a number of ludicrous reasons for opposing equal pay legislation. For example, the Heritage Foundation has suggested that equal pay laws actually hurt women because businesses simply won't hire them if they are required to pay them fair wages. Sen. John McCain (R-AZ) has claimed that women would receive better compensation if they just had more "education and training."

The final tally was 58 senators supporting the measure, and 41 opposing. Because our Senate is often ridiculous, 41 trumps 58.

What's more, note that this was only a vote on the motion to proceed. In other words, opponents didn't just disagree with the proposal, they filibustered a measure that would have let the Senate debate the idea.

And what did those opponents have in common? Looking at the roll call, every Republican in the chamber voted to kill the Paycheck Fairness Act, while every Democratic except one supported it. The lone exception was, of course, Ben Nelson.

In a statement issued by President Obama on the blocking of the Paycheck Fairness Act, he said:

"I am deeply disappointed that a minority of Senators have prevented the Paycheck Fairness Act from finally being brought up for a debate and receiving a vote. This bill passed in the House almost two years ago; today, it had 58 votes to move forward, the support of the majority of Senate, and the support of the majority of Americans. As we emerge from one of the worst recessions in history, this bill would ensure that American women and their families aren’t bringing home smaller paychecks because of discrimination. It also helps businesses that pay equal wages as they struggle to compete against discriminatory competition. But a partisan minority of Senators blocked this common sense law. Despite today’s vote, my Administration will continue to fight for a woman’s right to equal pay for equal work."

This from a Senate with 41 Republicans -- next year it will have 47. 

I wonder how female Republican Senators like Sens. Susan Collins (R-ME), Kay Bailey Hutchison (R-TX),  and Olympia Snowe (R-ME) can look at themselves in a mirror without wincing. What could they possibly tell their daughters, sisters, mothers, and female constituents to justify this behavior. Perhaps female Senators should take a 25% pay cut in solidarity with the Republican position, this would also reduce government spending, consistent with another policy close to the hearts of the GOP.

Senator Susan Collins (R-Maine), said in a September 22, 2010 New York Times Op-Ed; the  Paycheck Fairness Act would “lead to excessive litigation on to the small-business community, it would hold employers liable for the “lingering effects of past discrimination” — “pay disparities” that have been “spread and perpetuated through commerce.” thus endangering jobs. Senator Collins also said the proposed law "overlooks mountains of research showing that discrimination plays little role in pay disparities between men and women, and it threatens to impose onerous requirements on employers to correct gaps over which they have little control."

Other Republicans said that the fact that the bill would have limited employers’ basis for paying different wages was problematic. Republicans, according to a position paper by Romina Boccia of Independent Women's Forum complain the bill would unfairly burden employers with more regulations and paperwork, vastly expand the role of government in employers' compensation decisions, and discourage flexible working arrangements. And of course, there was the “trial lawyers will love this!” contingent, who suggest the bill would expose employers to far greater liability and potentially frivolous lawsuits.

This makes me wonder why any women vote Republican. According to data collected by Edison Research for the National Election Pool, based on questionnaires completed by 17,504 voters leaving 268 polling places around the nation on  Election Day 2010 and 1,601 telephone interviews with absentee and early voters, 51% of women voters voted Republican. I don't get it. This is like chickens voting for Colonel Sanders. - BD

Senator Bernie Sanders Asks FCC To Block Comcast/NBCU Merger

By John Eggerton
Broadcasting & Cable

Senator Sanders says even with conditions, deal is not in the public interest.

Comcast/NBCU deal critic Sen. Bernie Sanders (I-Vt.) wrote the FCC commissioners Tuesday telling them they should nix the proposed deal and that it would not be in the public interest "no matter how many conditions were attached."

Essentially his opposition boiled down to allowing another big media company to get bigger, particularly given evolving distribution models that the new company could exert control over. "The sale of NBCU to Comcast would create an enormously powerful, vertically integrated media conglomerate, causing irreparable damage to the American media landscape... We do not need another conglomerate with control over the production and distribution of sports news and entertainment."

Sanders cited the American Cable Association's study from former FCC economist William Rogerson that the deal could cost consumers an additional $2.4 billion--Comcast has called the study flawed and said in a response at the FCC Monday that it was misleading and should be given "no weight."

Sanders took that figure and ran with it, saying that he thought it would be an obvious conclusion that the public interest would not be serviced by "a regressive wealth transfer of $2.4 billion from ordinary citizens to what would be one of the largest corporate entities in the United States."

Sanders said that if the deal were approved, Comcast would have the incentive to favor NBCU over other content companies in its carriage negotiations. Comcast has pointed out that there are program access rules that prevent favoring co-owned cable content.

Comcast has also agreed to apply those rules to its retransmission consent negotiations for NBC and co-owned Telemundo stations.

"The overwhelming record in support of the Comcast NBCU transaction show the significant public interest benefits that it will deliver, including more independent programming choices, more opportunities for ownership diversity, more local public affairs programming, more viewing options for families and children, and accelerating the ‘anytime, anywhere' video future consumers want," said Sena Fitzmaurice, VP of government communications at Comcast, in response to the Sanders letter. "The FCC has heard support from over 400 elected officials from coast to coast, along with countless community organizations and groups representing diverse communities.

Various analyses provided by Dr. Rogerson on behalf of ACA, the interest group cited by Sen. Sanders, and a handful of other opponents of the transaction have been thoroughly rebutted. With regard to transition and integration planning, this is common, proper, and expected in a transaction of this type. At every step of the way, this process has been supervised by counsel to ensure faithful adherence to the rules, and that will continue."

Sanders' letter comes as the FCC and Justice are widely believed to be wrapping up their reviews of the deal. The FCC's informal shot clock for reviewing the merger runs out next week.

Tuesday, November 16, 2010

Sam Zell to Bow Out of Tribune


The Wall Street Journal

Tribune Co. Chairman Sam Zell said Monday that he doesn't see himself having an operating role in the media company after it exits bankruptcy.

"I think when we're done with the bankruptcy process I will turn it over to whoever the creditors decide they want to run it, and wish them a lot of good luck," Mr. Zell told CNBC in an interview.

Mr. Zell, a real-estate mogul, led an $8.2 billion leveraged buyout of Tribune in 2007. Creditors blame the deal for leaving the owner of the Chicago Tribune, the Los Angeles Times and cable TV station WGN insolvent, forcing it to seek Chapter 11 protection in late 2008.

Nearly two years later, the company remains stuck in bankruptcy proceedings as creditors have battled over the circumstances that led to the 2007 buyout. Late last month, the company filed a reorganization plan backed by its leading creditors, taking what it hopes is a final step toward exiting bankruptcy.

In the meantime, some of Tribune's leading creditors have been quietly working on finding new leadership to steer the company post bankruptcy. Among the candidates floated to replace Mr. Zell as chairman are former News Corp. executive Peter Chernin and former Walt Disney Co. Chief Executive Michael Eisner, according to people familiar with the matter. Creditors also have had informal discussions with recruiters about who might fill the CEO spot, the people said.

The CEO spot was vacated last month when Randy Michaels resigned after a string of unflattering revelations about the culture at Tribune under his leadership. The board created a four-person executive council to replace Mr. Michaels.

Monday, November 15, 2010

The Increasing Income Inequality Between The Wealthiest Americans And Everyone Else

Excerpts from an Op-Ed by New York Times columnist FRANK RICH
"Who Will Stand Up to the Superrich?"

Can this country afford the systemic damage being done by the ever-growing income inequality between the wealthiest Americans and everyone else?

The wealthiest 1 percent of American earners took in 23.5 percent of the nation’s pretax income in 2007 — up from less than 9 percent in 1976.

During the boom years of 2002 to 2007, that top 1 percent’s pretax income increased an extraordinary 10 percent every year.  Over that same period, the median income for non-elderly American households went down and the poverty rate rose.

The wealthiest 1 percent of Americans now have tax rates a third lower than the same top percentile had in 1970.

Only 40 percent of those asked in the 2010 election Nov. 2 exit poll approved of an extension of all Bush tax cuts. President Obama’s argument against extending the cuts for the wealthiest has now been reduced to the dry accounting of what the cost would add to the federal deficit. As he put it to CBS’s Steve Kroft in a "60 Minutes" interview, “the question is — can we afford to borrow $700 billion?”

The very top earners will be by far the biggest beneficiaries if there’s an extension of the expiring Bush-era tax cuts for income over $200,000 a year (for individuals) and $250,000 (for couples). The G.O.P. has vowed to fight to the end to award this bonanza, but that may hardly be necessary given the timid opposition of President Obama and the lame-duck Democratic Congress.

“How can hedge-fund managers who are pulling down billions sometimes pay a lower tax rate than do their secretaries?” ask the political scientists Jacob S. Hacker (of Yale) and Paul Pierson (University of California, Berkeley) in their deservedly lauded new book, “Winner-Take-All Politics.”

The Tax Policy Center found in 2008 that only 2 percent of all Americans reporting small-business income, regardless of tax bracket, would see tax increases if Obama fulfilled his pledge to let the Bush tax cuts lapse for the top earners.

The economist Dean Baker calculated that the yearly tax increase at the lower end of that bracket, for those with earnings between $200,000 and $500,000, would amount to $700 — which “isn’t enough to hire anyone.”

Those in the higher reaches aren’t investing in creating new jobs even now, when the full Bush tax cuts remain in effect, so why would extending them change that equation? American companies seem intent on sitting on trillions in cash until the economy reboots. Meanwhile, the nonpartisan Congressional Budget Office ranks the extension of any Bush tax cuts, let alone those to the wealthiest Americans, as the least effective of 11 possible policy options for increasing employment.

Nor are the superrich helping to further the traditional American business culture that inspires and encourages those with big ideas and drive to believe they can climb to the top. Robert Frank, the writer who chronicled the superrich in the book “Richistan,” recently analyzed the new Forbes list of the 400 richest Americans for The Wall Street Journal and found a “hardening of the plutocracy” and scant mobility. Only 16 of the 400 were newcomers — as opposed to an average of 40 to 50 in recent years — and they tended to be in industries like coal, natural gas, chemicals and casinos rather than forward-looking businesses involving the Green Economy, tech or biotechnology. This is “not exactly the formula for America’s vaunted entrepreneurial wealth machine,” Frank wrote.

As “Winner-Take-All Politics” documents, America has been busy “building a bridge to the 19th century” — that is, to a new Gilded Age. To dislodge the country from this stagnant rut will require all kinds of effort from Americans in and out of politics. That includes some patriotic selflessness from those at the very top who still might emulate Warren Buffett and the few others in the Forbes 400 who dare say publicly that it’s not in America’s best interests to stack the tax and regulatory decks in their favor.

Many of the countless tasks that need to be addressed to start rebuilding an equitable America are formidable, but surely few, if any, are easier than eliminating a tax break that was destined to expire anyway and that most Americans want to see expire. Two years ago, Obama campaigned on this issue far more strenuously than he did on, say, reforming health care. Now he and what remains of his Congressional caucus are poised to retreat from even this clear-cut battle. You know things are grim when you start wishing that the president might summon his inner Linda McMahon.

Broadcast Union News:
Instead of raising the age for collecting Social Security, just remove the income cap so everyone pays in on their full income. Instead of cutting taxes, cut tax breaks for corporations and the top 5% of income earners. Give tax rebates for actual full-time job creation, and impose tax penalties for moving jobs overseas.  Pass the Employee Free Choice Act (EFCA) to create a more level playing field for collective bargaining. Create massive public works projects to fix America's crumbling infrastructure and create jobs. Bring back the draft so that all Americans, from every economic sector, have a stake in ending the wars that have gone on far too long. Make campaign contribution reforms that create a fair chance for candidates to compete without huge corporate contributions.  Pass the Marriage Equality Act, eliminate "Don't Ask, Don't Tell", and increase funding for enforcement of human rights, worker rights, and civil rights. Do these things and we will have made a start on saving Democracy in this great nation. - BD

Theodore W. Kheel, Labor Mediator, Dies at 96

Mr. Kheel, center, with Mike Quill of the Transport Workers Union, left, and Howard Felix, the New York City labor commissioner, in 1961.

The New York Times

Published: November 14, 2010

Theodore W. Kheel, who was New York City’s pre-eminent labor peacemaker from the 1950s through the 1980s, a mediator and arbitrator sought after by both City Hall and the White House to help avert or end strikes of crippling consequence, died on Friday. He was 96 and lived in Manhattan.

His death was confirmed on Sunday by Edward Nebb, a family spokesman.

Mr. Kheel, who played a pivotal role in ending newspaper, teacher and subway strikes in New York, was the go-to guy for mayors, labor leaders and business executives during the post-World War II era, when unions were far more powerful than they are now and a savvy, respected ringmaster was often needed to pressure and cajole all sides to reach a settlement.

Mayor Robert F. Wagner Jr. turned to Mr. Kheel to help end the 114-day newspaper strike of 1962-63, and President Lyndon B. Johnson summoned Mr. Kheel to Washington in 1964 to help mediate 10 days of feverish negotiations that prevented a nationwide rail walkout.

In a flood of articles hailing his successes at resolving myriad conflicts, he was described as “the most influential peacemaker in New York City in the last half-century” and the “master locksmith of deadlock bargaining.” In 1970, The New Yorker called him “the one man best able to keep in working order a substantial portion of the sputtering labor machinery not only in New York City, but over much of the Eastern Seaboard.”

Not only was Mr. Kheel New York’s leading mediator, he was also its premier arbitrator, deciding more than 30,000 disputes ranging from whether the city’s plans to introduce a new bus service violated the transit union’s contract to whether a worker should be suspended because he was seen walking his dog on a day he had called in sick.

Even though Mr. Kheel handled disputes for bakers, garbage collectors, plumbers, subway conductors, tugboat captains and undertakers, he was an unabashed bon vivant, fond of fast sports cars and fine food.

He once owned a stake in Le Pavillon, a leading French restaurant in Manhattan, and leased wine bin No. 1 at both the Rainbow Room and Windows on the World. He also represented numerous artists, including Robert Rauschenberg and Christo.

Mr. Kheel juggled enough obligations to keep a half-dozen people busy — he served as chairman of Republic National Bank, he was president of the National Urban League from 1956 to 1960, and he wrote a 10-volume treatise on labor law.

He also made millions of dollars as an entrepreneur; he was the lead investor in the giant Punta Cana resort, built along 30 miles of jungle in the Dominican Republic, and chairman of a company that distributed MasterCards to more than 1.4 million union members.

During his more than half a century of involvement in labor matters, Mr. Kheel was known above all else for his extraordinary ability to get feuding parties to make concessions to reach an agreement. His efforts included helping coordinate bargainers and mediators during the 35-day New York City teachers’ strike in 1968.

One industrial relations expert said that Mr. Kheel — six feet tall, athletic and dapper in his Saks Fifth Avenue suits — infused the handling of labor disputes with the kind of energy that Fiorello H. La Guardia brought to City Hall and George M. Cohan to Broadway. A 1965 profile in The New York Times Magazine quoted one expert as saying: “Some men look at Gina Lollobrigida and are set aflame. Kheel gets the same reaction by exposure to a really tough strike situation.”

Mr. Kheel had well-honed techniques. Upon entering a negotiation, he first asked each party to tell him what was on its mind, what it hoped to achieve and what it thought of the other side’s proposals. He would often have the two sides negotiate across a table until they got so loud and angry that he felt the need to separate them — at which point he often engaged in shuttle diplomacy.

“The essence of mediation is getting information,” Mr. Kheel once told The New Yorker. “The dirtiest question you can ask in bargaining is ‘What will you settle for?’ If you ask that question, you ought to resign, but that’s the question you must have an answer to. You get it by asking every question except that. What’s left over is the answer.”

During the 1962-63 newspaper strike, which involved 10 unions and seven daily newspapers, including The Times, The Herald Tribune, The Daily News and The New York Post, Mayor Wagner summoned him 90 days into the walkout. Mr. Kheel arrived at City Hall with two bottles of Champagne to toast what he thought was an imminent settlement. It took another month before an agreement was reached; it involved 868 hours of bargaining to negotiate what Mr. Kheel called “the 12th resurrection of Humpty Dumpty.”

Local 6 of the International Typographical Union presented the biggest obstacle to a settlement, demanding a more generous contract than several other newspaper unions and fearing that the publishers’ automation plans would throw its members out of work.

Mr. Kheel was widely credited with crafting the final settlement, which gave the typographical union a larger raise than some other unions received, along with assurances that its members would not lose their jobs when the publishers embraced automation.

A disgruntled publisher once called him Cecil B. DeKheel.

“I churn the collective bargaining process like butter,” Mr. Kheel once said. “It’s a butter I hope everyone enjoys, but in any case I’m sure it’s a butter everybody can live on.”

Theodore Woodrow Kheel was born in Brooklyn on May 9, 1914, named after Theodore Roosevelt and Woodrow Wilson. His father, Samuel, headed a real estate company, and his mother, Kate Herzenstein, ran the company after his father died.

After graduating from DeWitt Clinton High School in the Bronx, Mr. Kheel went to Cornell University, graduating in 1935; he graduated from its law school two years later.

The day after passing the New York bar exam, he married Ann Sunstein, whom he had met in a literature class at Cornell. A journalist and civic leader, she was secretary of the board of the New York Urban League for a quarter-century. She died in 2003.

They had five daughters: Ellen Jacobs of Manhattan; Constance E. Kheel of Buskirk, N.Y.; Dr. Marti Kheel of El Cerrito, Calif.; Jane K. Stanley of Bethesda, Md.; and Katherine Kheel of Baltimore; a son, Robert J., of Manhattan; 11 grandchildren; and six great-grandchildren.

In 1938, Mr. Kheel joined the legal staff of the National Labor Relations Board. He later worked for the War Labor Board, which was charged with maintaining labor peace to promote the war effort.

In 1946, Mayor William O’Dwyer named him deputy director of New York City’s new division of labor relations, and a year later he became the division’s director.

In 1948, he returned to private practice, joining what became Battle, Fowler, Neaman, Stokes & Kheel. In May 1949, he was named impartial arbitrator for the city’s private transit industry, settling disputes between the often-militant Transport Workers Union and seven private bus lines. In 1956, Mayor Wagner named him arbitrator for the citywide transit authority, a position he held for 33 years. During that period he handled an average of 1,000 disputes a year.

Michael J. Quill, the transit workers’ fiery leader, voiced grudging respect for Mr. Kheel, saying, “Whether we won or lost, we knew we had a fair shake.” Over the decades, Mr. Kheel helped mediate more than a dozen transit contracts and helped end the 12-day transit strike of 1966.

In 1974, despite objections from the printers’ union, he helped write a landmark contract that enabled the city’s newspaper publishers to introduce “cold type,” or computerized typesetting. In exchange, the typographical unions’ workers were promised lifetime job guarantees.

He was active as a philanthropist, heading the Gandhi Society for Human Rights in the 1960s, which helped the Rev. Dr. Martin Luther King Jr. raise money for the civil rights movement, and the Metropolitan Applied Research Center, which helped finance Kenneth B. Clark’s research on behalf of civil rights.

In 1978, he again helped settle a newspaper strike, this time an 88-day walkout against The Times, The Daily News and The Post. Mr. Kheel began losing influence in the early 1980s after Mayor Edward I. Koch and other critics said he was partly responsible for the city’s financial woes, through overly generous contracts for transit workers and others.

While in his 80s and 90s, he continued his longtime environmental activities, founding Earth Pledge and the Nurture Nature Foundation. He joined the law firm of Paul, Hastings, Janofsky & Walker and remained a stalwart supporter of collective bargaining.

In explaining how to reach a settlement, Mr. Kheel once gave this advice: “It is like sculpting an elephant. You chip away everything that doesn’t look like an elephant, and what’s left is an elephant. When you’re trying to get a labor contract, you do the same thing. You chip away everything that doesn’t belong in the agreement, and what’s left is the agreement.”

Friday, November 12, 2010

Payback! Tribune Creditors Want to Claw Back $250M in Exec Bonuses

By Dominic Patten

LA. Noir

Tribune creditors want their pound of flesh from the troubled Chapter 11 media company -- $250 million pounds of financial flesh to be exact.

Just one day after a judge OK’d big 2010 bonuses for hundreds of company executives, the Committee of Unsecured Creditors asked the court for the right to claw back hundreds of millions in bonuses and stock paid out to Tribune Company officers and directors, past and present, in 2007 and 2008.

This particular set of creditors, as others involved in the 23-month bankruptcy case have before, also asked the Delaware court for permission to pursue legal action against current Tribune owner Sam Zell and possible future owners such as JPMorgan Chase, a past lender and creditor itself, for their role in the effort to take the company private in late 2008.

Internal dishonesty is what worries the creditors, say one of their lawyers.

“There are inherent conflicts that make it very difficult, if not impossible, for a company to vigorously pursue actions” against its own executives and directors," J. Landon Ellis said in Thursday’s filing

A spokesman for Tribune told TheWrap the company had no comment on the matter.

U.S. bankruptcy law gives courts the power to reverse and recoup awards granted to a now-bankrupt company’s executives and directors in the year leading up to its Chapter 11. All funds recovered are usually dispensed to petitioning creditors.

Tribune submitted its latest comprehensive reorganization plan to the bankruptcy court on Oct. 22. The plan is supported by major creditors JPMorgan Chase, New York equity firms OakTree Capital Management and Angelo, Gordon & Company and the Committee of Unsecured Creditors.

Tribune Co. creditors would receive about a third of the money they are owed -- plus a stake in a fund that will bankroll buyout lawsuits -- according to its plan filed in U.S. Bankruptcy Court in Delaware. The bankruptcy plan gives creditors $420 million, or about 33 percent of what they originally had coming. The terms are more generous to bondholders than previous proposals.

Strategically unsurprising, Thursday’s filing secures the Unsecured Creditors' legal rights to pursue further action against Zell and others if it decides to. The move doesn’t reflect a breakdown in the reorganization plan or their support for it.

Other creditors, such as bondholder Aurelius Capitol Management submitted their own reorganization plans for the company on Oct. 29.

Declaring that Aurelius’ plan “offers a surer and quicker path for Tribune to emerge from bankruptcy,” company Chairman Mark Brodsky said late Friday “Tribune was bankrupted by a transaction that the court-appointed Examiner found to have been fraudulent.

Brodsky made no secret of his disagreement with Tribune management by adding, “The Company has remained in bankruptcy far longer than necessary, because of attendant conflicts of interest and attempts to cover up.”

Tribune’s plan is supported by major creditors JPMorgan Chase, the Committee of Unsecured Creditors and New York equity firms OakTree Capital Management and Angelo, Gordon & Company – in fact, the company’s proposal is heavily based on one the latter hedge funds put forth in September.

The storm clouds of the creditors reorg plans came on the same day that various hedge funds in the company’s bankruptcy sued JPMorgan Chase, Bank of America and Citigroup over the 2007 buyout that took Tribune private. The suit alleges that the banks knew the deal would ultimately fail but went ahead "improperly motivated by tens of millions of dollars worth of fees and the desire to curry favor” with Zell.

Hearings on the various plans are expected in late Nov, with creditor voting not long afterwards … or, as has been common in this Chapter 11 saga, it could all change again.

The Chapter 11 case and the machinations to find a way out of the courts hasn’t been the only crisis at the company of late. Amidst late summer reports that former Disney CEO Michael Eisner may become Chairman, Tribune has seen the messy departure of Chief Innovation Officer Lee Adams and CEO Randy Michaels in the last two weeks.

The duo was at the center of what was being referred to as frat-boy behavior in the company’s executive offices. Tribune is now being run by a four-member executive council of Don Liebentritt, chief restructuring officer, Nils Larsen, chief investment officer, Tony Hunter, president, publisher and CEO of Chicago Tribune Company, and Eddy Hartenstein, publisher and CEO of Los Angeles Times.

Tribune Creditors Seek Millions From Insiders

(Reuters) - Tribune Co creditors asked a Delaware judge to let them try to recover millions of dollars awarded to insiders in the year prior to the media company's bankruptcy, saying they can do a better job than Tribune can.

In a Thursday court filing, Tribune's official committee of unsecured creditors said it wants current and former Tribune officers and directors to return more than $250 million of awards, including bonuses and restricted stock.

The move escalates the battle over the future of Tribune, whose properties include the Chicago Tribune, the Los Angeles Times, WPIX, KTLA, and the WGN television superstation.

The committee also sought permission to pursue claims against Tribune's past owners or possible future owners. Among these are current owner Sam Zell and JPMorgan Chase & Co (JPM.N), one of his lenders.

"There are inherent conflicts that make it very difficult, if not impossible, for a company to vigorously pursue actions" against insiders and owners, J. Landon Ellis, a lawyer for the committee, wrote in the filing with the U.S. bankruptcy court in Wilmington, Delaware.

U.S. bankruptcy law allows a court to reverse some awards granted to insiders in the year leading up to a bankruptcy. Sums recovered go to creditors.

Gary Weitman, a Tribune spokesman, did not immediately return a call on Friday seeking comment.

Tribune sought Chapter 11 protection on December 8, 2008, a year after Zell -- the billionaire real estate developer -- led an $8.2 billion buyout.

The Chicago-based company has filed a reorganization plan, which has support from JPMorgan and hedge funds Angelo Gordon & Co and Oaktree Capital Management.

Three creditor groups have filed competing plans. These differ mainly in how various legal claims might be pursued.

The case is In re: Tribune Co, U.S. Bankruptcy Court, District of Delaware, No. 08-13141.

(Reporting by Jonathan Stempel in New York; Editing by Phil Berlowitz)

Wednesday, November 10, 2010

Creditors Pitch Rival Tribune Reorganization Plans

WILMINGTON, Del., Nov 10 (Reuters Legal) - The home stretch of Tribune Co's two-year bankruptcy started to feel like a political campaign as creditors began stumping for votes in a race to reorganize the newspaper publisher and broadcaster.

In an unusual ending to a fraught Chapter 11 process, four reorganization plans will be mailed out to creditors whose votes will help determine how to bring the owner of the Chicago Tribune and Los Angeles Times out of bankruptcy.

In most bankruptcies, creditors vote on one plan.

The company collapsed into bankruptcy in 2008, a year after real estate developer Sam Zell bought the U.S. media company with a pile of debt that quickly proved unsustainable.

The backers of the rival plans filed letters with Delaware's bankruptcy court pitching their proposals. The letters will be mailed with ballots, pending approval by Judge Kevin Carey.

The plans differ in how to assign blame for the bankruptcy and whether it is better to settle or sue.

The company's plan proposes to settle many pending legal claims, heading off possibly years of court skirmishes. The backers of that plan -- the committee of unsecured creditors, JPMorgan Chase & Co and hedge funds Angelo, Gordon & Co and Oaktree Capital Management -- argue it offers the quickest way to ensure creditors get paid.

In contrast, the plan proposed by the Aurelius Capital Management hedge fund recommends sending lawyers after nearly everyone who benefited from the buyout.

Aurelius Chairman Mark Brodsky said in the fund's letter that Tribune has proposed a "starkly one-sided settlement" process that would make the banks pay bondholders, led by Aurelius, only about $420 million. Brodsky argues that bondholders stand to recover their full $2 billion if they win most of their legal claims.

"I analogize this to Bonnie and Clyde being caught robbing a bank and then negotiating plea bargains with each other rather than with the prosecutor," he wrote.

Others took aim at Aurelius's promises of winning big legal awards.

A plan by the Step One Lenders, which funded the first part of Zell's buyout, essentially agrees with Aurelius that lenders who rendered Tribune insolvent should not be in the front of the line for repayment on their claims.

The Step One plan argues that those lenders are the ones who funded the second part of Zell's deal. They say the first part of Zell's buyout did not leave Tribune insolvent, according to a court-appointed examiner.

"The Aurelius Plan 'conveniently' provides Aurelius with control of the Litigation Trust, meaning it is Aurelius's lawyers who are hoping to be paid all of the Trust's litigation fees," said the letter from the Step One Lenders.

A letter from Bridge Loan Lenders promoted their position on the divide between lenders and bondholders in the order of repayment. They consider their proposed settlement the only fair way to bring the company out of bankruptcy.

The company's letter notes that no party has signed on to the Bridge Loan Lenders plan, making payouts under the plan "highly speculative, at best."

Rivals to the company's plan pointed out the beneficiaries of the company's plan were the backers, who will not have to face litigation for their role in the leveraged buyout.

Tribune filed for Chapter 11 bankruptcy in December of 2008. The case is In Re Tribune Co, U.S. Bankruptcy Court, District of Delaware, no. 08-13141. Tribune's lead bankruptcy counsel is James Conlan of Sidley Austin in Chicago.

(Reporting by Tom Hals of Reuters; Additional reporting by Jeff Roberts of Reuters Legal)


Tribune Settlement Plan Statement
Step One Plan Statement
Bridge Plan Statement
Litigation Plan Statement