When Sam Zell completed an $8.2 billion acquisition of the Tribune Company with an equity investment of only $315 million, he was described alternately as “reckless” and a “genius” by the financial press.  Zell’s main strategy was to sell assets and deleverage his position, but plans to sell the Food Network fell through, while plans to sell Wrigley Field and the Chicago Cubs were delayed, and Zell took the Tribune Company (excluding the baseball franchise) into bankruptcy in December of 2008.  On October 13th 2009, a U.S. bankruptcy judge ruled that the Tribune Company could sell the Chicago Cubs to the Ricketts family for $845 million.  In conjunction with the sale of the team, the Chicago Cubs filed for a separate bankruptcy, designed to protect its new owners from claims from Tribune Company creditors, the “Chicago Tribune” reported.

Lesson Learned: Allow a little extra time for the sale of complex assets in your business plans, especially if that is critical to your financial survival.

4/19/2011 update:  The Wall Street Journal reported today that the Tribune’s former creditors are suing the banks who financed Zell’s acquisition, and the former shareholders who received the $8 billion payout, under a legal concept known as “fraudulent transfer”, arguing that the deal was so fundamentally flawed, they should have known it would destroy the Tribune.