Bondholders seek probe into Zell’s $8.3-billion LBO

27 Aug 2009

1

Bondholders of newspaper and television station owner Tribune Co have approached a bankruptcy court judge for allowing them to scritinise the company's 2007 sale to real estate billionaire Sam Zell.

They say the deal over-burdened the company beyond its capacity thus causing its fall.

In a filing late Wednesday before Delaware court, the bondholders say, the fraudulent deal weighed down a business which was already in decline and the banks that put together the deal with Zell's $8.2 billion leveraged buyout (LBO) "now concede the transaction was a mistake.''

The bondholders intend to stall Tribune's exit from chapter 11 protection under the existing plan that they say will virtually hand over the company to the very banks that caused its demise. The group representing 18 per cent of the company's bonds has demanding access to related e-mails and other communications as well as interviews of key participants in the deal.

Zell acquired Chicago-based Tribune, that owns the Los Angeles Times and Chicago Tribune in addition to several dailies and 23 TV stations and then took the company private in December 2007 becoming its chairman and CEO.

The deal had come in for a last minute scrutiny due to declining conditions at the Tribune by the four financing banks – JP Morgan Chase & Co, Merrill Lynch & Co, Citigroup Inc and Bank of America Corp.

Business History Videos

History of hovercraft Part 3 | Industry study | Business History

History of hovercraft Part 3...

Today I shall talk a bit more about the military plans for ...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of hovercraft Part 2 | Industry study | Business History

History of hovercraft Part 2...

In this episode of our history of hovercraft, we shall exam...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of Hovercraft Part 1 | Industry study | Business History

History of Hovercraft Part 1...

If you’ve been a James Bond movie fan, you may recall seein...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of Trams in India | Industry study | Business History

History of Trams in India | ...

The video I am presenting to you is based on a script writt...

By Aniket Gupta | Presenter: Sheetal Gaikwad

view more
View details about the software product Informachine News Trackers