Report: Tribune Wants To Keep Secrets In Bankruptcy Case
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WILMINGTON, Del. (CBS) – A published report says the Tribune Company tried to keep some of its own internal politics secret in its ongoing bankruptcy case.
The Wall Street Journal reports the Tribune Company is resisting the release of communications between chief restructuring officer and former general counsel Don Liebentritt, and a special board committee following a bankruptcy probe that found some aspects of Sam Zell’s 2007 buyout deal may have amounted to fraud.
Information in a letter filed in court indicated that the special committee was trying to distance itself from Liebentritt and thought he might be biased in favor of Zell, the Wall Street Journal reported.
The Tribune redacted a paragraph in which the committee considered finding an outside attorney, because Liebentritt was “Sam’s guy,” the Wall Street Journal reported.
Also redacted was an e-mail by board member Mark Shapiro, who also suggested distancing the special committee from Liebentritt and instead using a new counsel who is “totally objective,” the Wall Street Journal reported.
The Tribune also wanted to maintain secrecy regarding information about a “$268 billion insider bonanza” in 2007, and the payment of $23.7 million to J.P. Morgan Chase & Co., a major lender, out of view of the judge in the bankruptcy case.
Zell bought out the Tribune Company in 2007 for $8.2 billion. Lawsuits claim the deal was pushed through because some banks were so interested in reaping huge fees and getting old loans repaid that they repeatedly ignored warnings that the 2007 buyout would bury Tribune in too much debt.
The Tribune Company, which owns the Chicago Tribune, Los Angeles Times and more than 20 TV and radio stations, filed for bankruptcy protection in December 2008, a year after the buyout, because it wasn’t generating enough revenue to repay more than $13 billion in debt.
Separately, company chief executive officer Randy Michaels resigned last year, amid allegations in a front-page New York Times article that he and his colleagues turned the Tribune Co. into a raunchy fraternity house environment characterized by frequent “use of sexual innuendo, poisonous workplace banter and profane invective.”
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