The New York Post is reporting that by midnight tonight, a group of Tribune Company lenders are expected to sue Sam Zell for his role in the leveraged buyout of that company, which precipitated its collapse.
More from the Post:
Lawyers for the lenders, who are racing a Wednesday deadline to get the charges filed, will allege, sources said, that Zell’s Tribune took on too much debt and made the company immediately insolvent.
Any recoveries from the Zell suit will be combined with the proceeds, if any, from related cases and will be placed in a litigation trust to be paid out to creditors, a person close to the situation said.
If filed, the lawsuit comes just weeks after Zell’s lawyers oddly tried to convince bankruptcy judge Kevin Carey to warn lenders not to sue. Carey complied–although if the Post is right, looks like it didn’t matter much.
Previously on FBLA: Sam Zell Doesn’t Want to Be Sued: Good Luck With That