Tribune Company creditors have filed suit against Timothy P. Knight, the former publisher of Long Island’s Newsday newspaper, in an attempt to recover payments he received from Tribune Co. before it filed for bankruptcy.
According to a Bloomberg report, the committee of unsecured investors that filed the suit is seeing to recoup $7.4 million.
It’s just the latest in a string of lawsuits filed against current and former Tribune Co. executives. Last week, the judge in the Tribune Co. bankruptcy case authorized creditors to recover payments made by the company.
At least 18 lawsuits have been filed so far, according to Bloomberg.
The clock started ticking last week after the judge's ruling as major creditors are racing to file suit against chair Sam Zell by midnight Tuesday.
As they have long promised, a number of creditors, according to the New York Post, plan to go after Zell for his role in taking Tribune private in late 2007 and the crippling debt it accumulated. That $8.2 billion buyout, which saw Tribune in bankruptcy court less than a year later, was cited for “dishonesty” by independent examiner in the Chapter 11 case earlier this summer.
Any money recovered from suing Zell, which could be a long drawn out process unto itself, would be put in a court created litigation trust to be paid out to creditors.
