Thursday, August 16, 2007

Tribune Employees Financial Protection Committee Newsletter

Tribune Employees’ Financial Protection Committee
Issue 1 Vol. 1 August 2007

Welcome to the Tribune Employees'Financial Protection Committee,
a voluntary organization of Tribune employees concerned for the long-term viability of our company and the economic security of our families.


Will Management Answer Concerns of Employee Owners?

Tribune's meeting for shareholders to approve the company's sale will convene at 9:00 a.m., August 21, 2007, at Tribune Tower, 435 N. Michigan Ave. Chicago

A majority of outstanding shareholders will undoubtedly vote to support the transaction proposed to buy back outstanding shares at a $34 per share price; a price well above today's trading price which has been steadily plummeting since the company's buyout was announced. Unfortunately, it is Tribune employees that bear the risk.

The deal, which transfers ownership of the company to its employees and billions of dollars of new debt through an Employee Stock Ownership Plan (ESOP) provides no voice for employees in the governance of either the ESOP or the operating company.

Since the deal was announced, the company and its handpicked ESOP trustee, Great Banc, have leveraged our livelihoods by taking on $7 billion in debt. They agreed to higher than expected interest rates and shortened repayment periods in order to secure the financing. The market responded and Tribune's share price has plummeted 17%. Analysts now warn that Tribune may not be able to service the debt or secure the financing for the second half of the deal.

Tribune employees and employee owners need answers to important questions.

For example:

  • What happens if the company is unable to secure financing for the 2nd half of the deal We're already carrying $7 billion in debt and our company is in a downward spiral. Selling the Chicago Cubs won't cover it, so what is the company's plan?

  • The company and its handpicked ESOP trustee agreed to extraordinary terms to secure the financing for the first half of the deal--which may not be able to be paid. It has been widely reported that the banks will be reluctant to loan Tribune the money it needs to close the deal, and if so at what new cost?. What protections (other than going to court) are in place for ESOP participants to avoid billion of dollars in further debt?

  • Is the Board seeking a plan B? Are other scenarios being considered to protect the long-term interests of the company, the employees or the communities we serve?

The real question is will management face its employees and shareholders and answer these important questions?

It's Our Company, It's Our Future!

1 comment:

Anonymous said...

"It's Our Company, It's Our Future!"

Ya right....... and I have a bridge I want to sell you. Don’t be so naive!

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