Benefits & ERISA Law

Employees File Lawsuit Over Tribune ESOP

By Suzanne Wynn

When the Tribune Company was purchased by Samuel Zell by utlizing an ESOP, one question was how long would it take before the litigation began. Today, that question was answered when a group of current and former employees filed suit in the U.S. District Court for the Central District of California. A copy of the complaint is available here.

The complaint is not a good read from a pension geek standpoint. In 115 pages, the complaint failed to tell a clear ERISA-related story typical of defined benefit plans which are converted to ESOPs which then lead to litigation. I am hopeful that the forthcoming motions to dismiss or motions for summary judgment will provide more details about the frozen Tribune Company Employees’ Pension Plan which was merged into the Times Mirror Pension Plan which had an ESOP then merged into the Times Mirror Savings Plan, and at some point these plans became the Tribune ESOP.

A quick check of the filed Form 5500s reveal that these are not small plans. For example, the Tribune Company Employee Stock Ownership Plan for 2003 had over 11,000 participants and beneficiaries, and total assets of over $800 million. The Tribune Company Master Retirement Savings Trust had over $2.2 billion in assets for the 2006 plan year listed on Schedule H of Form 5500. A really interesting part of this litigation to watch will be the ultimate attorneys fees awarded when this litigation ends.

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Full post as published by Pension Protection Act Blog on September 17, 2008 (boomark / email).