Federal judge slaps bid by Sam Zell’s favorite GreatBanc to limit damages in Tribune ESOP debacle
Wednesday, March 2, 2011
A federal judge in Chicago denyies a request by the trustee of Chicago-based Tribune Co.’s employee stock ownership plan to cap damages for its liability in the demise of the plan. Greatbanc Trust Co. asked the court to limit its damages to $15 million after Judge Rebecca Pallmeyer of U.S. District Court ruled last year that the trustee violated the Employee Retirement Income Security Act when it let the ESOP buy $250 million in shares as part of Tribune’s 2007 leveraged buyout by Chicago real estate mogul Sam Zell. This means that GreatBank could face exposure to a verdict as high as $250 million should it choose to go to trial instead of settling the class-action lawsuit for a lesser amount. Read more at chicagobusiness.com. The case, Neil v. Zell, is set for trial late this year.