Tribune Co. agreed to pay former CEO Randy Michaels $675,000 in a settlement stemming from his resignation from the company on 10/22/10. The company will also cover up to $50,000 in Michaels’ legal fees, according to documents filed 11/22 in U.S. Bankruptcy Court in Delaware.
Michaels, who resigned under pressure after a NY Times story alleged he created a sexually charged “frat house” atmosphere in the corporate suite, had demanded that he receive $900,000, the pro-rated potion of his planned 2010 management incentive bonus.
His argument, the papers said, was that he was effectively “terminated without cause,” which would trigger the payment under terms of the bonus plan.
Tribune disagreed, but decided to settle to avoid protracted litigation over the issue, the document said. After “extensive negotiations” between the company and Michaels’ lawyers, he agreed to the reduced amount. The settlement also includes a non-disparagement clause and several provisions that limit the company’s future liability to claims brought by Michaels.
Chicago Tribune sources say the settlement, which will have to be approved by the judge in Tribune nearly three-year-old Chapter 11 proceeding, represents the only exit payment Michaels will receive. Tribune also said in the documents that the Official Committee of Unsecured Creditors in the case and the U.S. Trustee have no objection to the settlement plan.
