Tribune Creditors Sue Over Buyout
November 3, 2010 at 4:29 AM (PT)
TRIBUNE CO.'s unsecured creditors filed two lawsuits MONDAY against SAM ZELL, the company's management and officers, and the lenders who backed ZELL's 2007 buyout of the company.
The Official Committee of Unsecured Creditors filed the two suits with U.S. Bankruptcy Court in DELAWARE, alleging that the buyout was fraudulent and breached the defendants' fiduciary duty to shareholders, calling it "among the worst in American corporate history ... designed to cash out the large shareholders of TRIBUNE and to line the pockets of" ZELL and the company's directors and officers.
The suits, which were expected, follow the filing of three reorganization plans to compete with TRIBUNE's own proposed plan; the plans all take different approaches to dealing with the lawsuits.