Anthony Casey Discusses Tribune Bankruptcy on 'Chicago Tonight'

Former Tribune Shareholders Could Suffer Clawbacks
Chicago Tonight
December 21, 2011

Colorado investor Mark Lies was recovering from heart surgery and “grappling with the idea of what might happen to [his] remaining worth” when he received a summons in the mail in October.

The summons was from creditors, who are attempting to “claw back” more than $2.5 billion of the $8.2 billion in Tribune Company’s leveraged buyout from 2007. In this case, a clawback refers to money or benefits that are distributed, but then taken back as a result of special circumstances.

“I have a lot of frustration in the process, as an individual,” said Lies, who declined to go into more detail due to his attorney’s guidelines. “I feel it’s unfair the way the process has gone.”

The salient frustration was outlined in a two-page letter sent to Judge Kevin J. Carey of the United States Bankruptcy Court for the District of Delaware. In the letter, Lies said he was making no requests, but instead wanted to add a “human element” to the Tribune bankruptcy case.

“There are a lot of people who have been adversely affected,” Lies said in a phone interview with Chicago Tonight. “I think most people don’t know what to do. Now this is in the domain of big institutions to fight it out. So now, we, the small shareholders, are at risk.”

Up to 35,000 investors could receive summons like Lies, although the guidelines for these summons aren’t quite clear. When asked about the amount of shares he owned, Lies declined to disclose specifically, but said “way more than 100.”

At least $75,000 must be at stake, with parties from different states, to get a state law claim before a federal court, according to Anthony Casey, assistant professor of law at the University of Chicago. For state claims, there is no jurisdiction requirement. But shareholders who received less than $75,000—or those who have not received a summons—should not take solace in not being served, he added.

Anthony J. Casey