ESOPS Likely to Suffer First in Tribune Bankruptcy

Graph_down Chicago is NOT the place to be these days (of course people from Milwaukee already know that) — especially if you are a corrupt politician or a financially-stressed newspaper. On the newspaper side of things — Elizabeth Dale (Florida) writes to tell us that the ESOP angle of the The Tribune Company bankruptcy is truly a mess.

She points us to this story from the New York Times Deal Book:

The possibility of a bankruptcy filing at Tribune Company is an embarrassing development for Samuel Zell, the real-estate mogul who took the media company private last December.

But it is likely that Tribune’s employees — or, more specifically, the employees’ stock-ownership plan — would take the first hit.

Because of the unusual structure of Tribune’s $8 billion buyout, Tribune’s employee stock-ownership plan holds 100 percent of Tribune’s common equity, regulatory filings show. Common stockholders are generally the first to take a loss in a bankruptcy restructuring, and they usually recover next to nothing.

Mr. Zell, by contrast, supplied mostly debt in the complex transaction, putting him higher in line to get paid. His $315 million investment in the Tribune deal consisted of a $225 million promissory note; the rest was for warrants to buy about 40 percent of Tribune’s stock in the future.

Great, another self-centered corporate CEO looking out for himself and screwing the employees of his company. I guess we should be thankful that at least he is not asking for a bail out.

More about this story here.

Cross posted at Workplace Prof Blog.

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How Family and Office Roles Mix

Simpsons_family_dynamic Interesting article on this topic in the NYT last week.

Some highlights:

THE office joker. The mother hen. The king. The rebel. The gossip. The peacekeeper. The dude.

Anyone who has ever been part of a workplace culture can probably recognize at least one of those characters in the cubicle next door.

But workplace roles and the dynamics among colleagues can go much deeper than those somewhat superficial stereotypes, especially in a nation where many people spend as much time with colleagues as they do with their families, where the office so often mirrors the family.

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Return of the Sit Down Strike

Sit_down_woolworths_strike The title of this post is courtesy of Harris Freeman (Western New England) who brings to my attention the current situation in Chicago concerning the developments at Republic Windows:

Harris writes:

Members of the UE Local have started a sit-down strike after the employer shut down on a 3-day notice, violating the WARN Act, after Bank of America cancelled the business’s line of credit.

Union members are rotating in thirty-person shifts to staff the sit-down.   Here is the URL for one of a series of articles in the Chicago Tribune on the sit-down.

The NYT also did an article on the strike.

Harris asks some good questions including: are we going to see some new — and old — tactics by workers who are seeking to defend their unions and livelihoods in response to the rapidly unfolding economic crisis?

He also points out that maybe the news of this sit-down will lead to some interesting exam questions.

Cross posted at Workplace Prof Blog.

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