For the last several months, Sam Zell and Tribune Co. have been petitioning a Delaware court to let them handle their own bankruptcy management instead of handing the company over to creditors. Zell, who bought Tribune in 2007 and then promptly ran it into the ground, has outlined a plan that will get the company that owns papers like The Los Angeles Times and The Chicago Tribune back out of bankruptcy by May.
But now we know why Zell and other top brass at Tribune don’t want to turn management over to the creditors: that way they wouldn’t be able to pay themselves millions of dollars in bonuses after two years when many of their employees went on strike because of job cuts and poor working conditions.
According to Editor & Publisher‘s report today:
“Tribune’s plan to pay out as much as $45.6 million in bonuses would drain more than 10 percent of operating cash flow to reward top managers for a year in which cash flow fell to historic lows, attorneys for the Washington-Baltimore Newspaper Guild said in court documents filed a day before the hearing.”
The Newspaper Guild’s efforts were in vain though, as the Delaware court ruled that the bonuses fell under the prescribed “management incentive program.” Considering how much Zell loves newspapers, he needs that incentive to just not pack it all in.
Previously: Sam Zell Continues to Kill the Newspaper Business, Tribune Employees Lose What Little Stake They Had Left In Company, Tribune Memo to Staff: We’re Actually Making Money
, Tribune Co.’s No Good, Very Bad Week