(Reuters) - The bankrupt publisher of The Chicago Tribune and Los Angeles Times said it agreed to pay $32 million to settle a lawsuit filed by former employees.
In 2008, former Tribune employees filed a lawsuit against the Employee Stock Ownership Plan (ESOP) trustee, GreatBanc Trust, alleging violation of pension law.
The deal also resolves claims asserted by the United States Department of Labor (DOL) in connection with the ESOP and the DOL’s and GreatBanc’s objections to Tribune’s proposed plan of reorganization.
Under the agreement, insurers will fund $26.4 million of the payment, Tribune $4.45 million, and GreatBanc Trust will pay $1 million.
“This is a good result for all parties and ensures a smoother exit from bankruptcy once we have a confirmed plan,” said Don Liebentritt, Tribune chief restructuring officer.
Tribune said the multi-party agreement must be approved by the United States Bankruptcy Court for the District of Delaware and by the United States District Court for the Northern District of Illinois.
Reporting by Anand Basu in Bangalore; Editing by Gary Hill