Tribune Bankruptcy Snares Employees (ESOPs Fail to Deliver)
Tribune Bankruptcy Snares Employees
Tribune Filing Exposes Risks of ESOPs
Details on Tribune's ESOP arrangements
ESOP - Empoyee Stock Ownership Program
Tribune's bankruptcy filing highlights the risks of ESOPs that invest employee savings into company stock. Real estate mogul Sam Zell built a complicated deal to take over Tribune Co., putting little of his own money at risk.
If there is one thing Sam Zell foresaw correctly, it is this: The day after Zell announced he was buying Tribune for more than $8 billion, the real estate tycoon told Chicago Tribune reporters the deal would not change his lifestyle no matter what happened. But, he said, "it's likely to change yours."
How right he was. Just one year after Zell bought the company (BusinessWeek, 7/30/08), Tribune announced on Dec. 8 that it is filing for bankruptcy. That means Zell could lose a small fraction of his estimated $5 billion fortune. The reason: The man who likes to call himself "the grave dancer" put very little of his own skin in the game. Instead, employees of the Tribune properties will bear the brunt of the pain, as they technically own the company and hold its $12.9 billion in debt. Tribune reported $7.6 billion in assets.
(full article)
Tribune Filing Exposes Risks of ESOPs
Details on Tribune's ESOP arrangements
ESOP - Empoyee Stock Ownership Program
Tribune's bankruptcy filing highlights the risks of ESOPs that invest employee savings into company stock. Real estate mogul Sam Zell built a complicated deal to take over Tribune Co., putting little of his own money at risk.
If there is one thing Sam Zell foresaw correctly, it is this: The day after Zell announced he was buying Tribune for more than $8 billion, the real estate tycoon told Chicago Tribune reporters the deal would not change his lifestyle no matter what happened. But, he said, "it's likely to change yours."
How right he was. Just one year after Zell bought the company (BusinessWeek, 7/30/08), Tribune announced on Dec. 8 that it is filing for bankruptcy. That means Zell could lose a small fraction of his estimated $5 billion fortune. The reason: The man who likes to call himself "the grave dancer" put very little of his own skin in the game. Instead, employees of the Tribune properties will bear the brunt of the pain, as they technically own the company and hold its $12.9 billion in debt. Tribune reported $7.6 billion in assets.
(full article)
Labels: ESOP, failed newspaper, retirement plan
posted by Victor Lloyd Smith @ 12:08 PM
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