DealBook: Workers Pay for Debacle at Tribune

To view the latest DealBook headlines on your mobile device, go to: http://mobile.nytimes.com/blogs/dealbook

Edited by Andrew Ross Sorkin

TODAY'S TOP HEADLINES | Tuesday, December 9, 2008 M & A: Predicting More Declines for M&A BANKING: This Bonus Season, Wall St. Tries a Little Restraint PRIVATE EQUITY: BCE Seeks New Solvency Opinion HEDGE FUNDS: Activists Seek More Light on Dillard's Board OFFERINGS: Wall Street Surges on Stimulus Hopes VENTURE CAPITAL: A Web Start-Up Fueled by Ads? Good Luck LEGAL: Deal to Rescue American Automakers Moves Ahead TOP STORY Workers Pay for Debacle at Tribune To seal his $8.2 billion takeover of the Tribune Company, Samuel Zell literally mortgaged the future of Tribune's employees, Andrew Ross Sorkin writes in his latest DealBook column. A year after the buyout -- which even Mr. Zell called "the transaction from hell" -- the media company filed for Chapter 11 bankruptcy protection on Monday, and it is the employees who will pay. The buyout deal gave employees the equity in the newly private company, and now they will probably be left with very little. Much of the ire will be directed at Mr. Zell, the real estate baron whose knack for buying when everyone else is selling earned him a fit sobriquet for the news business these days: The Grave Dancer. But, Mr. Sorkin writes, he isn't the only one responsible for the debacle. Members of the Tribune board, the company's management and the bankers who walked away with millions of dollars in fees should have known the deal could end in ruin. Go to Column from The New York Times» Go to Article from The New York Times» Go to Item from DealBook» Go to Related Item from DealBook» Go to Related Item from DealBook» Read More Add a comment ADVERTISEMENT Back to Top MERGERS & ACQUISITIONS Analysts at Bernstein Research projected that the drop-off in merger and buyout activity will deepen in 2009 and won't bottom out until 2010. Go to Item from DealBook» Read More Add a comment Tribune excluded the Chicago Cubs and Wrigley Field from its petition for Chapter 11 bankruptcy protection, thereby keeping the sale of two profitable assets from being detoured by its future in reorganization. Go to Article from The New York Times» Read More Add a comment Natural grocer Whole Foods filed a federal lawsuit Monday against the Federal Trade Commission, claiming the regulator violated its due process rights in a dispute over its acquisition of rival Wild Oats. Go to Article from The Associated Press via The New York Times» Go to Article from The Austin America-Statesman» Go to Press Release from Whole Foods» Read More Add a comment Ford Motor is in talks to sell its Volvo car business to its China partner Changan Automobile Group, the National Business Daily reported, citing an unnamed source at the Chinese company. Go to Article from Reuters via The New York Times» Read More Add a comment Rodman & Renshaw Capital Group, an investment banking boutique that specializes in the biotechnology industry, made an unsolicited bid for Cowen Group, which was quickly rejected. Go to Item from DealBook» Go to Cowen News Release from PRNewswire via Yahoo News» Go to Statement from Rodman & Renshaw» Read More Add a comment Anheuser-Busch InBev, the world's largest brewer, announced plans on Monday to cut 1,400 jobs in the United States, some 6 percent of the workforce there, as it sought a return on its $52 billion merger. Go to Article from Reuters via The New York Times» Go to Press Release from Anheuser-Busch Inbev» Read More Add a comment The Vodafone Group , the world's biggest mobile phone provider by sales, said Tuesday it has offered to buy Swedish wireless navigation device company Wayfinder Systems for 239 million Swedish kronor ($29 million) in cash. Go to Article from The Associated Press via The New York Times» Go to Press Release from Vodafone» Read More Add a comment Back to Top INVESTMENT BANKING With Wall Street pay under scrutiny as never before, Morgan Stanley is attaching a string to its annual bonuses -- one that would enable the bank to yank some money back from its employees. DealBook has the internal memo. Go to Article from The New York Times» Go to Item from DealBook» Merrill Lynch's compensation committee balked at giving any payout to the firm's chief executive, John A. Thain, who had requested a $10 million bonus this year, The New York Times said. On Monday, New York attorney general Andrew M. Cuomo had urged the firm not to pay the bonus. Go to Item from DealBook» Go to Press Release from Merrill Lynch» Read More Add a comment Citigroup's chief, Vikram Pandit, faces risks as the call for more C.E.O. scalps get louder. In his latest rescue memo, Jack Flack offers some public-relations advice. Go to Item from Jack Flack» Separately, a holiday toy-train exhibit in New York is in jeopardy now that Citi has canceled its sponsorship of the annual installation, Bloomberg News reports. Go to Article from Bloomberg News» Read More Add a comment Joshua Persky, the out-of-work investment banker who grabbed headlines last summer by handing out resumes wearing a sandwich board in midtown Manhattan, has landed a new job. Go to Item from DealBook» Read More Add a comment Back to Top PRIVATE EQUITY Bell Canada said in an announcement Monday that it has hired PricewaterhouseCoopers to prepare an independent solvency analysis as it seeks to persuade KPMG to change its mind about the company's solvency post-merger. Go to Item from DealBook» Read More Add a comment Private equity firm Charterhouse Capital may be in for a tough climb in its reported drive to raise 5.2 billion pounds ($7.6 billion) for a new buyout fund. Go to Article from The Telegraph» Read More Add a comment Petty Enterprises released at least three dozen employees Monday as the private-equity backed racing team continues to search for either a merger or a miracle that would keep the famed organization operating in 2009. Go to Article from The Associated Press via The New York Times» Read More Add a comment Back to Top HEDGE FUNDS Two activist hedge funds, Barington Capital and Clinton Capital, are demanding more information about Dillard's board members' use of corporate jets and other perquisites, as well as fuller disclosure of the ties between the Dillard family and independent directors. Go to Article from The New York Post» Go to Article from The Wall Street Journal (Subscription Required)» Read More Add a comment Back to Top I.P.O. / OFFERING Stocks moved sharply higher on Monday as Wall Street extended a global rally amid redoubled efforts to try to revive the economy -- including President-elect Barack Obama's pledge for broad infrastructure spending and signs that the government will bail out Detroit's troubled automakers. Go to Article from The New York Times» Read More Add a comment Stocks were mixed Tuesday in Europe and Asia as investors awaited news of an expected bailout for American automakers. Go to Article from The New York Times» Read More Add a comment Back to Top VENTURE CAPITAL As advertising shrinks once again, Web entrepreneurs and venture capitalists are desperately seeking new sources of revenue. Go to Item from Bits» Read More Add a comment Limited partners who invest in venture capital firms are backing out of their commitments to fund individual V.C. funds. Go to Article from GigaOm via The New York Times» Go to Article from The Wall Street Journal (Subscription Required)» Read More Add a comment Better Place, which promotes electric vehicles, said Tuesday it will build battery exchange stations in Japan as part of a government pilot project to encourage the use of green cars. Go to Article from The Associated Press via The New York Times» Go to Press Release from Better Place» Read More Add a comment Back to Top LEGAL The White House and Democratic Congressional leaders said Monday that they were close to agreeing on the terms of a $15 billion government rescue of the American automobile industry that would impose expansive federal oversight of the auto companies. While the details were still in flux, reports from Bloomberg News and elsewhere said the government might end up holding warrants to buy stakes in General Motors, Chrysler and maybe Ford Motor Company. Go to Article from The New York Times» Go to Article from Bloomberg News» Go to Article from The Detroit Free Press» President-elect Barack Obama's view on the realignment the American automobile industry sounds perilously close to a word that no one in Mr. Obama's camp wants to be caught uttering: nationalization. Go to Article from The New York Times» Read More Add a comment General Motors has unleashed its blunt-spoken vice chairman, Robert A. Lutz, hoping that his straight talk will help convince lawmakers to approve a bridge loan to stave off bankruptcy, and help fend off mounting criticism of G.M.'s chief executive. Go to Article from The New York Times» Go to Item from DealBook» Read More Add a comment In brazen and carefully choreographed scams here and in Canada, Marc S. Dreier, who in 1996 founded a 250-lawyer firm that bears his name, is said to have tried to take advantage of the current financial crisis by selling phony debt to hungry hedge funds looking for deals. Go to Article from The New York Times» Breakingviews, looking at the alleged fraud perpetrated by Mr. Dreier, wonders how in the world these funds fell for it. Go to Article from Breakingviews» Read More Add a comment Gov. Bill Richardson of New Mexico, whom President-elect Barack Obama has chosen to be commerce secretary, has a reputation for doing whatever it takes to cajole companies to invest here in his home state, often using his considerable powers of persuasion to seal deals. Go to Article from The New York Times» Read More Add a comment Three months after Fannie Mae and its sibling, Freddie Mac, were effectively nationalized, a number of analysts fear that the mortgage giant's vast holdings of risky home loans, some of which they say are designated as safer loans, are deteriorating rapidly along with the housing market. Go to Article from The New York Times» Read More Add a comment New York officials say the College Board, the national association that writes and administers the SAT test, has resolved a two-state investigation into deceptive marketing of student loans. Go to Article from The Associated Press via The New York Times» Go to Press Release from the Office of the New York Attorney General» Read More Add a comment Get home delivery of The New York Times for as low as $3.15 a week.

SEARCH DEALBOOK SITE DealBook | E-mail Preferences Help | Advertising Opportunities Does China have US bailout fatigue? If only December 9, 2008 Congress kicks Detroit's problems down the road December 8, 2008 How did anyone fall for Dreier's scam? December 8, 2008 Video: Chrysler's Plea Robert Nardelli, the chairman of Chrysler, urged members of the Senate Banking Committee to approve federal aid for his company. More» A Yahoo Bid? Icahn Has Doubts Carl Icahn said a partial offer for Yahoo was likely to fall flat with shareholders. More» What's a Wall Street Chief Worth? With taxpayers' money on the line, creating packages that pay enough -- but not too much -- becomes an even thornier problem. More» Tracking the Bailout The New York Times tracks how the $700 billion Troubled Asset Relief Program is being doled out to banks, insurance companies and more. More» Revolving Door The latest hires, promotions and departures at Kirkland & Ellis, Fannie Mae, BlackRock and more. More» The Deal Professor A blog-within-a-blog that looks at mergers, private equity and corporate governance through a legal lens, written by Steven M. Davidoff, a professor at the University of Connecticut School of Law and a former lawyer at Shearman & Sterling. More» The Rescue Squad DealBook's special section looks at the people reshaping Wall Street and what the new landscape might look like. More» Lehman's Fall Full coverage of Lehman Brothers' dramatic slide into bankruptcy protection. More» The Bear Bailout Full coverage of the proposed takeover of the troubled investment bank -- and the crisis that led to the sale. More» DealBook for BlackBerry Get one-click access to DealBook to read the latest deal news throughout the day. Visit mobile.nytimes.com/bbinstall directly from your BlackBerry or by sending the text message "db install" to 698698. More information on DealBook for BlackBerry. News By Industry Airlines / Autos Basic Industries Consumer Goods Energy / Utilities Financial Services Food & Beverage Healthcare Media Real Estate Retail / Leisure Technology Telecom Tools & Resources GET QUOTES Look Up Symbol RESEARCH SUITE Portfolio Company Research U.S. Markets International Markets Mutual Funds SEND A TIP OR FEEDBACK E-mail us at dealbook@nytimes.com Dealboard

About This E-mail DealBook is a joint production of The New York Times and NYTimes.com, published daily, Monday-Friday, except on U.S. Market holidays and during the last week of the year. Editorial staff: Andrew Ross Sorkin, Peter Edmonston, Michael de la Merced and Liza Klaussmann. You received this message because you signed up for NYTimes.com's DealBook newsletter. As a member of the BBBOnline Privacy Program and the TRUSTe privacy program, we are committed to protecting your privacy. Manage Subscriptions | Unsubscribe| Change Your E-Mail | Privacy Policy | Contact | Advertise | nytimes.com/dealbook

Copyright 2008 | The New York Times Company | Privacy Policy | 620 Eighth Avenue New York, NY 10018