Tribune gets OK to sell Cubs
Web Posted: 09/25/2009 12:00 CDT
By Steven Church - Bloomberg Tribune Co., the bankrupt newspaper publisher, won court permission to sell the Chicago Cubs, paving the way for the baseball team to file bankruptcy to make the transaction final.
Under the sale process approved last month by U.S. Bankruptcy Judge Kevin Carey in Wilmington, Del., Tribune would transfer the Cubs to the family of TD Ameritrade Holding Corp. founder Joe Ricketts. The transaction would bring about $740 million to the company's creditors.
Because the transaction is a so-called leveraged partnership, it will enable Tribune to avoid paying about $300 million in taxes, said tax consultant Robert Willens, who teaches a class on tax law at the business school at Columbia University. The structure, however, probably will prompt questions from the Internal Revenue Service, Willens said.
“They are generally hostile toward leveraged partnership transactions,” Willens said, citing past IRS rulings. “And this leveraged partnership is such a high-profile one.”
Calls and e-mails for comment to Tribune spokesman Gary Weitman weren't immediately returned. Ricketts family spokesman Dennis Culloton declined to answer questions about the tax issue.
“This is another positive step for the Ricketts family and their effort to acquire the controlling interest in the Chicago Cubs,” Culloton said in an e-mailed statement. “The family looks forward to obtaining final approval from the court and from Major League Baseball owners so they can begin leading this great franchise.”
On Thursday, Carey approved the deal to transfer the Cubs to the Ricketts family. Before the sale wins final court approval and can close, the main holding company for the Cubs, Chicago National League Ball Club LLC, must file bankruptcy to shield the buyer from future lawsuits.
