[pictured, the Hall & Oates of finance, Zell & Lurie in happier days]
After years of CSTB berating the Tribune Corporation on its mediocre stewardship of the Chicago Cubs, Tribco owner Sam Zell threw in the towel today and filed for Chapter 11 bankruptcy. As in, Tribco is one broke-ass GOP propaganda machine. Mind you, he could have gotten off a lot easier had he sold the Cubs when he said he would. But he didn’t, and I had to go all Keith Olbermann on him. For those currently litigating with Mr. Zell over the pension fund, Chapter 11 is one of the predicted moves that endangers said fund and allows Zell to use it as collateral in his debt schemes. Below, he promises that all debt “restructuring” will be approved by courts. What a relief! Zell did not name CSTB in his list of laments, but does he have to? Today’s LA Times carried the following white flag from Zell:
Money for that payment was to come from asset sales, particularly the sale of the Chicago Cubs baseball franchise. That sale, originally expected to take place earlier this year, has been delayed in part because of the credit crisis and is now expected to take place in 2009.
Some analysts had previously set the value of the Cubs at more than $1 billion. Zell, the chairman and CEO of Tribune Co., said in his statement that the baseball franchise would not be part of the bankruptcy filing. He said in a conference call with Tribune Co. reporters that he expects a deal for the baseball club to be completed soon ….
Zell attempted to reassure employees that payroll, benefits and retirement accounts should not be affected by the action. “The 401(k) is unaffected by the filing, and in general, the existing benefits in the pension and cash balance plans are also unaffected by the filing,” Zell said.
But he said during the interview with reporters that the deflated value of Tribune’s debt suggests not all of the company’s creditors will be paid. “Obviously, if the market’s perception of the debt is correct,” Zell said, “then we are talking about a pretty significant discount to everybody and probably some elements of the capital structure will have no recovery.”