Tribune Company disclosed in a bankruptcy court filing that the US Department of Labor (DOL) is investigating the company’s employee stock ownership plan. The ESOP which owns Tribune has allowed the company to avoid a considerable amount of taxes.
The DOL probe came to light because Tribune had to ask the bankruptcy court for permission to expand the scope of duties of the law firm it had already retained to represent in a lawsuit by several former and current employees which claims that the ESOP’s structure violates federal pension laws. On March 2nd Tribune received a subpoena from the DOL for “an extensive range of documents” for the departments own investigation into the ESOP. So, the company asked to be allowed to have the law firm handle that as well.
A Tribune Company spokesman called the DOL request “a routine inquiry” and said that that the company was providing all of the documents that had been requested.