Sometimes it pays to be a frat boy.
Tribune Co. has agreed to award its former CEO, Randy Michaels, he of the alleged sexual misconduct and drunken driving, a settlement of $675,000 following his resignation in 2010.
Michaels, whose legal name is Benjamin Homel, will also receive up to $50,000 for his legal fees, according to documents filed Tuesday in a U.S. Bankruptcy Court in Delaware – the site of the company’s greater bankruptcy suit.
Michaels resigned from Tribune in October 2010 shortly after a New York Times article exposed a “frat boy” culture of excessive drinking and lewd behavior.
However, Michaels later claimed that he was eligible for a pro-rated bonus through the Management Incentive Plan. The MIP says that one must be employed to collect the bonus, except in cases of death, disability, retirement and termination without cause.
Michaels said he quit because he assumed he would be fired.
Tribune, rather than engage in a lengthy settlement fight, decided to settle.
“Tribune believes that it has defenses to Michaels’ claim,” the company's filing states. “Nevertheless, to avoid the risks, cost and burdens of litigation, Tribune and Michaels negotiated and have agreed on the terms of a resolution of Michaels’ disputed post-petition claims.”
Tribune declined to comment further when reached by TheWrap.
In the filing, the company points out that it actually will pay Michaels less than he would have gotten if he won the case -- $900,000.
Still, this is bound to strike many as inexplicable given some of the things Michaels stands accused of.
Michaels oversaw a rocky time at the Tribune. Staff cuts were severe, his broadcast friends came in to supervise -- much to the chagrin of long-time print journalists -- and a morally questionable culture allegedly permeated many publications.
The settlement still requires approval from a federal bankruptcy judge.