Trib Creditors Dig For Colonel's Cash

Cantigny, foundation at risk

By Steve Rhodes
|  Friday, Jun 12, 2009  |  Updated 8:24 AM CDT
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Exterior nighttime shots of Tribune Tower.

Exterior nighttime shots of Tribune Tower.

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By the time creditors who are owed money by the bankrupt Tribune Company get done, they might be exhuming Col. McCormick from the grave and extracting his gold teeth.

For now, they just want to get their hands on his golf course and Army artifacts.

"Irked creditors are following the money from the 2007 leveraged buyout of Tribune Co. right to the stately acres and 27-hole golf course at the mansion-turned-museum commemorating the life and times of deceased Chicago Tribune publisher Robert R. McCormick," the Wall Street Journal's Bankruptcy Beat blog reports.

"Also in the cross-hairs of creditors in Tribune’s Chapter 11 case is the billion dollar-plus McCormick Foundation, which sold $1.5 billion worth of company stock in the LBO transactions, for a $963 million profit, according to tax records."

A group of creditors - bankers and investors - may soon gain control of Tribune from Sam Zell, according to recent reports.

Job one, in that case, will be recouping their losses - no matter who or what gets in their way or how far they must stretch their arms to get them around even tenuous sources of Tribune-tainted money.

"[H]ighly technical portions of the Bankruptcy Code provide that anyone who comes near a company a year before it goes belly-up and walks away richer is going to get banged on like a dinner gong by creditors," the Journal reports.

That would describe the McCormick Foundation, which reportedly sold $1.5 billion of Tribune stock for a $963 million profit as part of Sam Zell's leveraged buyout of Tribune Company.

The McCormick Foundation has been ostensibly independent from Tribune, but linked via stock and management.

When it all comes crashing down, don't expect Sam Zell to head for the jungle to feed his family, though. The provisions of his unusually structured buyout of TribCo left him with little personal exposure. It's everyone else who will feel the pain.

Steve Rhodes is the proprietor of The Beachwood Reporter, a Chicago-centric news and culture review.

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