Workers’ suit outrages Zell
Tribune Co. Chief Executive Sam Zell said Wednesday that he was outraged by a lawsuit filed this week that alleged his management of the business that owns the Chicago Cubs, the Los Angeles Times, KTLA-TV Channel 5 and other media properties is destroying the value of the company.
The suit, filed in U.S. District Court in Los Angeles by a group of current and former Times employees, contends that Zell and former Tribune CEO Dennis J. FitzSimons had planned to take the company private to enrich themselves to the detriment of employees.
The lawsuit against Zell and Tribune Co. seeks class-action status on behalf of employees of The Times and Tribune. “The lawsuit is filled with frivolous and unfounded allegations,” Zell said.
“As newspaper advertising revenues have declined severely over the last several months, we’ve had to take some tough steps. We’re not alone, of course -- the entire publishing industry is trying to deal with the challenges posed by a tough advertising environment and an economy in turmoil,” Zell said in an e-mail to employees.
He acquired control of Tribune in December in a deal that left the company with $12.5 billion of debt. The company has cut about 10% of its workforce since Zell took control.
Plaintiffs want to recover any losses to the employee stock-option plan, formed when Zell took control of the business, and want to replace Zell, the Tribune board of directors and the ESOP trustee.