In a motion filed in U.S. Bankruptcy Court in Delaware, the publisher of The Chicago Tribune and The Los Angeles Times said the payments were aimed at maintaining morale, union relationships and an essential union employee workforce.
“I believe that failure to timely pay the unpaid pension contributions would cause unrest and strain relationships with participating union employees and their unions at a time when their dedication and cooperation are most critical,” Chandler Bigelow III, Tribune’s chief financial officer, said in court papers, according to a report in the Chicago Tribune.
On the other hand, Tribune said if it fails to pay unpaid pension contributions it expects union representatives to immediately seek legal relief to compel the payment.
According to Reuters, the company is seeking the ability to immediately pay pre-bankruptcy contributions owed to the pension plans, provided the amount does not exceed $550,000. It is also seeking the ability to continue making contributions to those plans, while it operates in bankruptcy. The court filing said about $443,000 was due to be paid to the pension plans as of Dec. 8, when the company filed for bankruptcy protection.
Tribune added that its average monthly payment under the pension plans is about $407,000, according to the report. The company has about 13,940 employees and 2,450 part-time employees, about 15% of those employees are represented by the unions, it said.
Tribune, which owns eight major daily newspapers and several television stations, filed for bankruptcy protection after collapsing under a heavy debt load, just a year after real estate mogul Sam Zell took it private. Much of the $8.2 billion buyout price was paid for by borrowing against future contributions to the pension plans for Tribune’s workers, through their employee stock ownership plan.
A court hearing on the pension payment issue is set for January 15, according to court documents.
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