Tribune Creditors File Suit Against Zell
December 10, 2010 at 5:07 AM (PT)
As expected, SAM ZELL has been sued by creditors of TRIBUNE CO., as the NEW YORK POST reports that a suit filed late TUESDAY before the bankruptcy court's deadline for lawsuits against ZELL charges that ZELL and MORGAN STANLEY engineered the company's 2007 buyout knowing that the deal would lead to the company's destruction. ZELL borrowed over $10 billion to make the deal, and the suit charges ZELL, MORGAN STANLEY, JEFFREY CHANDLER, the ROBERT MCCORMICK FOUNDATION, MERRILL LYNCH, and 3,000 shareholders with being unjustly enriched by the buyout, which led to the company's bankruptcy.
ZELL's lawyer JON WASSERMAN told the POST, "We intend to defend ourselves vigorously. We did nothing wrong." Likewise, MORGAN STANLEY, through a spokeswoman, said, "We strongly reject these claims, which we believe to be frivolous and completely without merit."