Willes and Unterman Cost The Tribune Co. At Least $850 Million
It's certainly not been good for the Times, down more than 200,000 in circulation, threatened by persistent cost-cutting, suffering through catastrophes on the editorial page and repeated staff reductions.
But it's not been good for the Tribune either. Now, due to a federal court ruling that executives Mark Willes and Tom Unterman grossly mishandled the sale of two Times-Mirror Companies, including the quality book manufacturer, Matthew Bender, the Tribune owes a $850 million tax bill to the government.
Willes and Unterman, so clever while they were knifing each other under the table (Chief Financial Officer Unterman arranged the sale of Times-Mirror to the Tribune for the Chandler family, without letting CEO Willes know what he was up to), to think they could fool the government's tax auditors into thinking that they owed no tax on a taxable sale, are the bad boys in this drama.
Taken were the Tribune executives. Maybe, they will rescue themselves in bringing an appeal, but they have decided now to pay the tax bill pending further decisions, out of fear they will owe many millions of dollars more in interest if they go forward with an appeal and lose.
Willes walked away from the Times with a reported $64 to $100 million in severance when the newspapers were sold from underneath him, and even Unterman got a $1 million bonus for arranging the Bender sale. Two miscreants are smelling like roses while the poor Tribune, (we can feel sorry for them just once), is stuck with paying the taxes.
Would Tribune have bought Times-Mirror if it knew it would face such a large tax bill five years later? Probably not. And one of these days, like the Pharoah confronted with Moses and his plagues in ancient Egypt, the Tribune Co. executives will probably decide to let the Times go, selling the paper for a loss, maybe even to David Geffen.
Willes, inclined to boast always in the most silly way, thought he was getting Times-Mirror a $1.4 billion profit without having to pay any taxes. Now, a federal judge has told the Tribune it will pay the taxes.
Are Willes and Unterman smiling or ashamed? Unlike Richard Scrushy at HealthSouth down in Alabama, both have come away without victories in the courts, or even a glamorous third wife like Leslie Scrushy.
Could there be a lawsuit against Willes and Unterman by all those whose careers and fortunes were impacted by them?