Zell fights to avoid legal claims over Tribune deal
Tribune Co. Chairman Sam Zell is battling to avoid legal liability for leading what he called “the deal from hell,” the $8.2 billion buyout of the bankrupt newspaper and television company.
In court papers filed yesterday, Zell asked the judge overseeing Tribune's bankruptcy for permission to challenge a lawsuit filed against him by creditors. The lawsuit seeks to recover money from him, and other Tribune managers, whom creditors blame for the company's inability to repay about $13 billion in debt, most of which is tied to the 2007 buyout.
“He is the one person who did nothing wrong,” David Bradford, Zell's bankruptcy attorney, said in court yesterday, a few hours before filing the latest round of court papers in which the Chicago real estate billionaire denied responsibility for Tribune's insolvency.
Two groups of hedge funds have submitted competing plans to reorganize Tribune and resolve billions of dollars worth of legal claims related to the buyout. Both groups would allow a federal lawsuit against Zell and Tribune's other managers to go forward.
Chicago-based Tribune filed bankruptcy in December 2008, one year after the two-stage buyout was completed. The company owns eight newspapers, including the Los Angeles Times and the Chicago Tribune, with a combined daily circulation of 1.9 million last year. The company's 23 TV stations include sites in New York, Chicago and Los Angeles.
The bankruptcy case is In re Tribune Co., 08-bk-13141, U.S. Bankruptcy Court, District of Delaware (Wilmington).