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U.S. markets recover from steep losses
NEW YORK, Oct. 30 (UPI) -- Hedge funds representing $800 million in Tribune Co. debt said banks improperly went along with the 2007 sale of the company, court papers in New York say.
While Tribune Co. remains tied up in bankruptcy court in Delaware, hedge funds Alden Global Capital and Greywolf Capital filed suit in New York alleging Bank of America, Merrill Lynch Capital Corp., Citicorp North America Inc., and JPMorgan Chase went along with Sam Zell's $8 billion leveraged buyout out the Tribune Co. "improperly motivated by tens of millions of dollars worth of fees and the desire to curry favor with the billionaire Zell," the Tribune reported.
The hedge funds claim the banks knew the deal would drive the company into bankruptcy.
Further, said the hedge funds' attorney Howard Kaplan of Arkin Kaplan Rice, the banks are now using bankruptcy proceedings "as a shield to protect themselves."
Citigroup and Bank of America did not comment on the suit, while a JPMorgan spokeswoman could not be reached for comment, the Tribune said.
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