Tribune Company today announced a multi-party agreement to settle claims alleging violations of the Employee Retirement Income Security Act of 1974 (ERISA) in connection with Tribune’s Employee Stock Ownership Plan (ESOP). The claims were initially brought in 2008 in a lawsuit against the ESOP Trustee, GreatBanc Trust, by former Tribune employees. The agreement also resolves claims asserted by the United States Department of Labor (DOL) in connection with the ESOP and the DOL’s and GreatBanc’s objections to Tribune’s proposed plan of reorganization.
Under the terms of the agreement, there has been no finding of fault on the part of Tribune, nor any admission of wrongdoing or liability by the company or its officers, directors or employees.
The proposed agreement resolves the lawsuit as a non-opt-out class action settlement for a payment of $32 million for the benefit of ESOP participants and to cover expenses. The payment will be funded by insurers in the amount of $26.4 million, Tribune in the amount of $4.45 million, and GreatBanc Trust in the amount of $1 million.
The multi-party agreement must be approved by the United States Bankruptcy Court for the District of Delaware and by the United States District Court for the Northern District of Illinois.
“We are pleased to resolve the Department of Labor’s objections to the pending plans of reorganization for Tribune as part of GreatBanc’s settlement of the litigation,” said Don Liebentritt, Tribune chief restructuring officer. “This is a good result for all parties and ensures a smoother exit from bankruptcy once we have a confirmed plan.”