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Tribune Co. wins right to pay $8.8 mil in bonuses
Bloomberg News
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Published: 2/4/2009 8:42 AM

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Tribune Co., the second-largest newspaper publisher in the U.S., was authorized by the bankruptcy judge at a hearing yesterday to continue or adopt employee benefit programs for non-executive workers.

Extending a program in effect before the Chapter 11 filing, Tribune won the right to pay as much as $8.8 million in performance bonuses covering work before filing for reorganization on Dec. 8.

The bankruptcy judge also gave the green light for adopting a severance plan for non-union workers. The severance plan under union contracts will remain in effect.

Given the firings before the bankruptcy and the possibility of more in the future, Tribune decided morale would be enhanced by a clearly written severance plan applicable to all non-union workers who lose their jobs involuntarily. Fired workers are to receive two weeks’ pay, plus another week for every year with the company.

Tribune was acquired in December 2007 in a $13.8 billion leveraged buyout led by Sam Zell. It listed $13 billion in debt for borrowed money and assets of $7.6 billion.

Tribune owns the Chicago Tribune, Los Angeles Times, six other newspapers, and 23 television stations, in addition to the Cubs baseball team and Wrigley Field in Chicago. Neither the team nor the field is in bankruptcy. A sale of both to Tom Ricketts is in the works.

The case is In re Tribune Co., 08-13141, U.S. Bankruptcy Court, District Delaware (Wilmington).