Monday, December 22, 2008

Guild gets a seat at the table

The Washington-Baltimore Newspaper Guild was named last week to the creditors' committee in the Tribune bankruptcy filing. The committee also includes Merrill Lynch Capital Corp., JPMorgan Chase Bank, Deutsche Bank Trust, Warner Bros. Television, the Pension Benefit Guaranty Corp. and Vertis.

The Guild's inclusion on the committee follows its success last week in securing Tribune's commitment to pay promised severance and health care benefits to Guild-represented employees who recently accepted a company buyout. Payments were cut off for Tribune employees who were not covered by union contracts. The payments were threatened by Tribune's filing for Chapter 11 bankruptcy.

“Our ability to get a seat on the committee ensures that the voice of Tribune Company's workers will get heard in the proceedings,” said Bernie Lunzer, president of The Newspaper Guild-CWA.

Though it's not the table the union would prefer to be seated at, inclusion gives the Guild the opportunity to watch out for its members' best interests.


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Tuesday, December 9, 2008

As with a sale, union retains certain rights in a bankruptcy filing

The Guild at the Baltimore Sun responded quickly to yesterday's news with a bulletin letting its members know what the Chapter 11 filing means to them.

Also, according to this Chicago Tribune report, "The company has 180 days to come up with a plan the bankruptcy court accepts. Failing that, the court will consider competing plans from creditors and others."

Time to draw up competing plans. At all Trib papers. From the WBNG bulletin:

... the Guild has been working with local investors who are interested in buying The Sun, and it will continue to do so. Our goal is to get owners who are committed [to] serving the community, the readers and the advertisers with quality products and services.
From the archives: ESOP plan participation not automatic for union-covered employees

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Monday, December 8, 2008

Zell Hell. Realized.*

Today Tribune became the first major news organization to file bankruptcy. Since Zell made his bid to take over the company in early 2007, there was no shortage of expert opinion (summed up nicely here) that the complex plan under which he took the company private was risky and that employees would shoulder all the risk.

The guy who put up just $315 million of his own funds to engineer the $8 billion Tribune purchase a year ago this month in a deal that converted Tribune to "America's largest employee-owned company", now says filing Chapter 11 might ultimately save the company.

Though the company is nearly buried in $12.97 billion in debt, Zell carries little risk. Because employees own all the stock under the ESOP, they may get left holding empty stock(ing)s in the bankruptcy: the shareholders are the last to get paid out — behind Sam Zell.

"It has been, to say the least, the perfect storm," Zell said in a memo to employees. "A precipitous decline in revenue and a tough economy have coupled with a credit crisis, making it extremely difficult to support our debt. All of our major advertising categories have been dramatically impacted."

Also a year ago this month, Recovering Journalist wrote:

Just look at the tumult that accompanied Sam Zell's closing of his deal to buy Tribune Co. this week. The bankers were squeezing the deal right up to the last minute. Even Zell called it "the transaction from hell." And Zell's going to have to pedal—and peddle—as fast as he can to keep the company afloat financially. It's not just the Chicago Cubs that are going to be sold by Tribune. Look for a fire sale of real estate and newspapers (Los Angeles Times, anyone? Anyone?) as Zell strips the company for cash. And at this holiday time, say a prayer for the poor Tribune employees, who could be left holding the bag—through their retirement plan, which now owns the company through Zell's creative accounting—if things turn sour. Memo to Tribune employees: Get. The. Hell. Out.
Hundreds got out and left with relatively decent severance packages that are now in jeopardy. “All ongoing severance payments, deferred compensation and other payments to former employees have been discontinued and will be the subject of later proceedings before the court,” current employees were told in an internal Tribune memo.

Tribune Company may be saved under the Chapter 11. Current employees with less than one year in the ESOP may not suffer a big hit. It is former employees who may be impacted the most by the bankruptcy.
* Edited for clarification 12/09

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