The Tribune Co., the U.S. Department of Labor and Greatbanc Trust Co. have agreed to restore $32 million to the media giant’s employee stock ownership plan (ESOP).
As part of a 2007 company reorganization, the ESOP purchased all Tribune stock for $250 million. The DOL’sSecurity Administration (EBSA) began an investigation and claimed the deal was illegal under the Employee Retirement Income Security Act.
In addition to the Chicago Tribune, the company owns the Los Angeles Times, Baltimore Sun, Orlando Sentinel and Hartford Courant newspapers, along with 23 television stations including Chicago’s WGN.
EBSA claimed Greatbanc Trust failed to safeguard plan participants’ interests when it structured the deal.
A group of plan participants filed a class-action lawsuit against the company and Greatbanc in November of 2008. The company filed for reorganization under Chapter 11 of the bankruptcy code a month later. The Labor Department filed claims in bankruptcy court to prevent the reorganization.
The bankruptcy court approved the settlement in October 2011 and a federal court has now approved it.
The Tribune Co. and the Greatbanc Trust Co. deposited the $32 million into an independently managed settlement account for the benefit of the plan’s approximately 13,000 participants.