Current, Former Employees Sue Sam Zell
September 17, 2008 at 2:43 PM (PT)
A group of current and former LOS ANGELES TIMES reporters are suing TRIBUNE COMPANY Chair./CEO SAM ZELL, demanding that he and his close business associates be removed from the company's board of directors. The class action, filed in a federal court in CALIFORNIA, asserts that ZELL has damaged the company's reputation and business since taking over last DECEMBER.
ZELL took the TRIBUNE private with an employee stock ownership plan that involved borrowing against the company's existing assets, which increased debt to $13 billion. "Through both the structure of his takeover and his subsequent conduct, ZELL and his accessories have diminished the value of the employee-owned company to benefit himself and his fellow board members," the lawsuit said.
In response, ZELL issued the following statement:
"The lawsuit filed yesterday is filled with frivolous and unfounded allegations, and I hope every partner in this company is as outraged as I am at having to spend the time and money required to defend ourselves against it. The media industry is in crisis, the advertising environment is extremely difficult and the economy is in turmoil. The overwhelming majority of our employees have taken up the challenge; they are working hard, leading by example, and devoting themselves to re-inventing our businesses by developing new and innovative products for our readers, viewers and advertisers. As a
company we are attacking our problems and revolutionizing the media industry.
"This lawsuit is a mere distraction, and we will work quickly to see that it is dismissed. It
will not deter us from completing the work ahead."