Sam Zell, the real estate mogul, and other former officers and directors of Tribune Co. have agreed to a $200 million settlement that resolves allegations of fraudulent transactions related to the company’s 2007 leveraged buyout.
Reuters reported Wednesday (6/12) that the litigation trustee representing Tribune’s creditors filed the proposed settlement on May 31 with a Delaware-based U.S. bankruptcy court.
While all parties have signed off on the deal, it requires the judge’s OK. A July 11 hearing is on the docket.
Some 50 individuals including former CEO Dennis FitzSimons are parties to the settlement, which sees all including Zell admit no liability or wrongdoing, Reuters says.
Zell led a privatization effort of Tribune, through an $8.2 billion buyout, in December 2007. It proved to be a bad move, leaving the company with high debt that forced it to seek Chapter 11 bankruptcy protection in 2008.
Today, Tribune Media — the TV arm — is set to be purchased by Nexstar Media Group.
According to Reuters, Kirschner sought damages for various alleged breaches, including “unlawful” dividends and fraudulent transfers. He argued that Tribune officers and directors received more than $107 million from the leveraged buyout.
The bankruptcy case is In re Tribune Media Co, U.S. Bankruptcy Court, District of Delaware, No. 08-bk-13141. The multidistrict Tribune case is In re Tribune Co Fraudulent Conveyance Litigation, U.S. District Court, Southern District of New York, No. 11-md-02296.
