Tribune Company, which declared bankruptcy in December 2008, just got official permission to shell out $45 million in bonuses.

A Delaware judge approved the bonuses for 720 of the company's top managers and executives who work for their daily newspapers including the Los Angeles Times, Chicago Tribune, The Baltimore Sun.

The Washington-Baltimore Newspaper Guild and the U.S. bankruptcy trustee objected to the payouts, Editor & Publisher reports.

Tribune planned on giving out three separate bonus last year, in hopes of retaining a knowledgeable and experienced management team while the industry struggled.

It worked, until it came time for the company to pay up. The Washington-Baltimore Newspaper Guild, the U.S. trustee, two Baltimore-based Teamsters locals, and the Newspaper Guild of New York challenged the validity of the checks.

"There has never been an MIP like this one: an unprecedented payout of millions of dollars to a smaller number of executives in a year in which employee salaries were frozen to 'share the sacrifice' and there was an historic low in operating cash flow," the union wrote in a letter.

But Delaware bankruptcy judge Kevin Carey ruled that the bonuses are warranted.

"Here, the evidence demonstrates that the debtor was performing well relative to its competitors... I conclude that the relief requested is justified by the facts and circumstances of the case."

But there might be a catch for the Tribune:



Editor&Publisher: Tribune's plan to pay out as much as $45.6 million in bonuses would drain more than 10% of operating cash flow to reward top managers for a year in which cash flow fell to historic lows, attorneys for the Washington-Baltimore Newspaper Guild said in court documents filed a day before the hearing.

Read more:

Bankruptcy Judge Set To Give Tribune Co. Executives $45 Million in Bonuses



