Tribune Creditors Sue Ex-Chief, Executives Over Pre-Bankruptcy Payments
Tribune Co. creditors sued former Chief Executive Officer Dennis FitzSimons and other former and current executives to recoup payments they received within a year of the company seeking bankruptcy protection.
The official committee of unsecured creditors seeks $28.7 million that FitzSimons got in December 2007, according to a complaint filed today in U.S. Bankruptcy Court in Wilmington, Delaware. The lawsuits against FitzSimons and 17 other so-called insiders were filed four days after Judge Kevin J. Carey allowed the claims to recoup potentially voidable payments.
The media company, publisher of the Los Angeles Times and the Chicago Tribune newspapers, filed for Chapter 11 protection in December 2008 after a buyout led by real estate developer Sam Zell added $8 billion to the company’s debt.
Four different factions have submitted proposed plans of reorganization, prompting Carey to warn the parties on Nov. 29 that he would draft the plan if the groups couldn’t resolve their differences.
“These claims are being filed now to satisfy a two-year statute of limitations requirement and they are being stayed for the present time according to court order,” Gary Weitman, a Tribune spokesman, said in an e-mailed statement on behalf of the Chicago-based company and its CFO.
“The company is hopeful that these claims will be resolved during the course of the Chapter 11 process,” Weitman said.
Bigelow served as the company’s treasurer from 1998 to 2008 before being elevated to his present post. Tribune last month removed him and four other executives from a $43 million bonus program, citing creditor objections and litigation.
The case is In re Tribune Co., 08-13141, U.S. Bankruptcy Court, District of Delaware (Wilmington).
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