Tribune deal 'among worst in American corporate history'

A creditors committee in the Tribune Co. bankruptcy case has sued myriad parties involved in a 2007 leveraged buyout that it called "among the worst in American corporate history," alleging the deal pushed the company into bankruptcy less than a year later.

The committee of unsecured creditors in one of two lawsuits it filed in U.S. Bankruptcy Court in Delaware named as defendants Chairman Sam Zell, who bought Tribune in the $8.2-billion deal, and Tribune board members who negotiated with him, including Betsy Holden and William Osborn, saying the deal amounted to a fraudulent transfer of assets. Also named as defendants in the suit are former top executives, such as ex-CEO Dennis FitzSimons, who guided the transaction, and one-time major shareholders, such as the Chandler family, who cashed out through the deal. The second suit targets bank lenders who financed the deal and creditors who purchased that debt later. The committee seeks to reclaim profits and fees.