CHICAGO - (Mealey's) The Tribune Co., which is in Chapter 11 bankruptcy, announced Oct. 20 that it has reached a $32 million settlement with former employees who had sued the company alleging violations of the Employee Retirement Income Security Act of 1974 (ERISA), which may provide Tribune with a smoother exit from bankruptcy (In Re: Tribune Co., No. 08-13141, Chapter 11, D. Del. Bkcy.).
The settlement must be approved by the U.S. Bankruptcy Court for the District of Delaware and the U.S. District Court for the Northern District of Illinois, the company said in a statement on the Tribune website.
The ERISA claims at issue in the settlement were initially brought in 2008 in a lawsuit filed by a group of former Tribune employees against the employee stock ownership plan (ESOP) trustee, GreatBanc Trust. Today's agreement resolves claims asserted by the U.S. Department of Labor, which along with GreatBanc, had opposed Tribune's Chapter 11 reorganization plan.
The agreement resolves the ERISA litigation as a non-opt-out class action settlement in which Tribune's insurers will pay $26.4 million, Tribune will pay $4.45 million and GreatBanc will pay $1 million.
Under the terms of the settlement, there was no finding of fault on the part of Tribune, nor was there any admission of wrongdoing or liability by the company, its officers, its directors or its employees.
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