(Updates with source of money in third paragraph.)
Jan. 30 (Bloomberg) -- Tribune Co., the bankrupt Chicago- based newspaper publisher, is contributing $4.45 million to the $32 million settlement of an employee retirement-fund lawsuit that it’s no longer a party to.
U.S. District Judge Rebecca Pallmeyer today granted final approval to the settlement at a hearing in federal court in Chicago. The media company was dropped from the case after it filed for bankruptcy protection in December 2008.
The balance of the settlement money will come from Greatbanc Trust Co. of Lisle, Illinois, which was trustee and fiduciary of the retirement plan, and from Greatbanc’s and Tribune’s insurers, plaintiffs’ lawyer Daniel Feinberg said.
No objections were lodged against the proposed settlement, Feinberg told the judge today.
Dan Neil and Eric Bailey, reporters for the Tribune-owned Los Angeles Times, sued in 2008 on behalf of more than 13,000 plan participants after real estate investor Sam Zell and his closely held EGI-TRB LLC leveraged employee shares to take Tribune private in an $8.3 billion stock buyback.
Pallmeyer in 2010 ruled that Zell couldn’t be held financially liable for the workers’ losses and that only the bankrupt Tribune had received any of their plan assets. Greatbanc, which remained a defendant in the case, paid $1 million toward the settlement.
The newspaper publisher agreed to the settlement contribution after engaging in bankruptcy-court-assisted mediation with Greatbanc, their insurers, a committee of unsecured creditors and representatives of the U.S. Labor Department, according to court filings.
Bankruptcy court approval for the publisher’s contribution was granted in October, Feinberg said.
Gary Weitman, a spokesman for Tribune Co., declined to comment on Pallmeyer’s ruling. Charles Jackson, an attorney for Greatbanc, also declined to comment.
The case is Neil v. Zell, 09cv6833, U.S. District Court, Northern District of Illinois (Chicago). The bankruptcy case is In re Tribune Co., 08-bk-13141, U.S. Bankruptcy Court, District of Delaware (Wilmington).
--Editors: Andrew Dunn, Glenn Holdcraft
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