Reporting from Chicago — In a strange twist even by the standards of the tangled Tribune Co. bankruptcy, billionaire Sam Zell filed two suits against the company's former shareholders seeking to claw back proceeds from the failed leveraged buyout he led in 2007.
The suits, filed in Cook County Circuit Court by Zell affiliate EGI-TRB, piggyback on allegations by Tribune creditors that the debt-laden $8.2-billion buyout was a fraudulent conveyance, meaning it left the owner of the Los Angeles Times, KTLA Channel 5, Chicago Tribune and other media assets insolvent from the start.
That Zell is suing alongside the creditors is ironic given that he has been a principal target of their ire.
Creditors have contended that as architect of the deal and chairman of Tribune's board, Zell breached his fiduciary duty by pushing forward with the deal.
But because he owns a $225-million Tribune note, Zell is also a creditor and filed his suits Monday in that capacity.