Tribune gets a $344-million refund in U.S. income tax case
Tribune Co. said Monday that it had received a refund of about $344 million in income taxes and interest paid under a 2005 U.S. Tax Court ruling in a case it settled with the government.
A tentative settlement was reached last spring during an appeal of the 2005 decision, which had disallowed the tax-free reorganization of Matthew Bender & Co., a former subsidiary of Times Mirror Co. Tribune, based in Chicago, inherited the case when it acquired Times Mirror, then the parent of the Los Angeles Times, in 2000.
Net cash proceeds after taxes on the interest are about $286 million, the company said. The final settlement eases the effect of a ruling that Tribune said at the time could cost it $1 billion unless it won on appeal.
The case stems from the 1998 tax-free reorganization of Matthew Bender, a law industry publisher. The ruling in September 2005 that disallowed it unraveled hundreds of millions of dollars of presumed tax savings.
The ruling helped send Tribune and its stock into a downward slide that ended with the company, under pressure from its largest shareholders, putting itself up for sale and ultimately agreeing in April to go private in an $8.2-billion buyout led by real estate magnate Sam Zell.
Tribune owns 11 daily newspapers, 23 TV stations and the Chicago Cubs baseball team.