Zell, a billionaire investor who took over the Tribune in 2007, mismanaged the privatization of the company and added too much debt at the beginning of a recession and at a trying time for newspapers, which are hemorrhaging advertising revenue the Sun-Times notes.
"This was a textbook case of a leverage buyout gone bad," William Brandt Jr. president of Development Specialists Inc. a corporate turnaround expert not involved in the case, told the Sun-Times. "These were imbeciles who had no idea what they were doing."
The company was forced into Chapter 11 bankruptcy eight months ago, and as it gets ready to emerge from that status, creditors, who have grown impatient with Zell's stewardship are working on a plan that ousts him from power.
"The banks will be in charge," one insider told the Sun-Times.
The Tribune Company owns the Chicago Tribune, the L.A. Times, WGN-TV along with other newspapers and television entities.
"Since going private, we have re-engineered many of our existing products and introduced new ones, expanded our local news programming, dramatically reduced our expenses and positioned the company to succeed in the face of an extremely difficult ad environment and a worsening economy,” Tribune spokesman Gary Weitman told the Sun-Times.
“[Zell and other managers] remain actively engaged and committed to Tribune. The restructuring is still in progress and we continue having positive discussions with our various creditor constituencies. It is premature to speculate about the company's final ownership structure."