In a 600-page report filed Monday, bankruptcy investigator Kenneth Klee expressed concerns about the late stages of the Tribune Company’s 2007 sale to Sam Zell. The $8.2 billion deal may have left the company too shaky to survive, Mr. Klee found. Mr. Klee’s findings could hamper the company’s attempt to get out of bankruptcy protection, 20 months after it filed under Chapter 11 in 2008, according to the Wall Street Journal and the Chicago Sun-Times.
From the Journal:
Tribune’s management, board and 2007 financial advisers are cast in a harsh light in Mr. Klee’s report. He said that part of financial projections made by Tribune management in October 2007 were too rosy and, while not deceitful “bears the earmarks of a conscious effort to counterbalance the decline in Tribune’s 2007 financial performance and other negative trends in Tribune’s business, in order to furnish a source of additional value to support a solvency conclusion.”
Mr. Klee, who interviewed Mr. Zell, said that he found no evidence that Mr. Zell acted dishonestly during the deal.