Tribune Employees Shortchanged

While Tribune is still navigating the bankruptcy process, creditors are unlikely to keep the employee stock ownership plan, leaving workers with worthless shares. In 2007, real-estate tycoon Sam Zell used the stock plan, called an ESOP, to gain tax benefits on the $8.2 billion buyout of the struggling company. The plan made employees official owners with 100 percent of the equity, but they have no say over management or the board. In the bankruptcy, they are viewed as common shareholders with less claim than other creditors. "That's the typical scenario for bankruptcy," said Corey Rosen, executive director of the National Center for Employee Ownership. "The creditors say, 'Forget about the ESOP. It's common stock and well down the list of creditor situations.'"