Tribune Co. agrees to pay former CEO up to $725K

AP News
Posted: Nov 22, 2011 8:58 PM
Tribune Co. agrees to pay former CEO up to $725K

Tribune Co., which is working to emerge from bankruptcy protection, has agreed to pay former CEO Randy Michaels up to $725,000 to settle a dispute over a bonus.

Michaels had demanded to be paid a $900,000 bonus when he resigned 13 months ago. His resignation was triggered by reports airing Tribune employees' complaints about allegedly raunchy behavior by Michaels and other executives.

Tribune Co. disclosed the settlement agreement in documents filed Tuesday in Delaware bankruptcy court, where it has been trying to reorganize its finances for nearly three years.

The company, which is based in Chicago, owns major newspapers including the Los Angeles Times and Chicago Tribune, as well as more than 20 television and radio stations.

It sought bankruptcy protection because of financial problems brought on by a steep downturn in newspaper advertising and a debt-laden buyout engineered by real estate mogul Sam Zell. That 2007 deal ushered in Michaels, a former radio station disc jockey who was promoted to CEO in December 2009.

Michael argued his resignation was the equivalent of being fired because he was pressured to step down.

In its Tuesday court filing, Tribune Co. lawyers argued it made financial sense to pay Michaels a reduced bonus plus legal fees rather than risk being hit with an even higher bill. If the dispute went to trial and Michaels prevailed, Tribune Co. estimated it would be charged an additional $18,000 per month for delaying the payment.

A court hearing on whether the settlement with Michaels should be approved is scheduled Dec. 13 before U.S. Bankruptcy Judge Kevin Carey.