ESOP fable

The U.S. Department of Labor is investigating the employee stock ownership plan, or ESOP, real estate mogul Sam Zell used to buy Tribune Co., it was revealed Thursday in bankruptcy court. From the Wall Street Journal:

The plan borrowed the billions of dollars used to finance the deal and in turn received all of Tribune's common shares. The company has said the value and fate of the ESOP will be determined in bankruptcy court, though stock is typically wiped out in the bankruptcy process.

The ESOP deal is also the subject of a class-action lawsuit filed by current and former staffers at the Los Angeles Times. (WSJ via LA Observed)