The November 16, 2009 Employee Ownership Update is online and discusses the following:

• United Steelworkers, Mondragon Cooperatives Launch Joint Agreement
• Tribune Company to Drop ESOP
• ESPP Survey Shows Participants More Committed
• NCEO Board Nominations Now Open

The Update discusses how the Tribune Company is dropping its ESOP:

While there had been discussion of keeping the ESOP through bankruptcy reorganization in the hopes of providing some value for employees, the complexity of doing that did not seem worth the effort. The ESOP is, however, still under investigation by the Department of Labor.

Tribune Co. is ending the ESOP for a profit sharing plan provides additional information:

Tribune Co., the newspaper publisher that filed for bankruptcy protection in December, said it will replace the employee stock-ownership plan it began in December 2007 with a profit-sharing program.

The move comes just months after Tribune creditors began to turn up the heat on Zell by threatening an investigation of the leveraged buyout he used to take over the company.

The creditors asked the federal bankruptcy court in August for authority to hire an outside law firm to probe Zell's $8.2 billion deal. Zell took on debt to fund the takeover of what had been a publicly traded company, but the worst market for advertising since the recession forced the media conglomerate into bankruptcy last December.

The publisher will end the so-called ESOP once it emerges from bankruptcy, Chief Administrative Officer Gerald Spector said in a memo to staff today. Tribune employees were each allocated a portion of the company when it was taken private for $8.3 billion by billionaire Zell in 2007.

The Tribune Company Filed for Bankruptcy last December.

The Update also discusses a joint collaboration agreement between the United Steelworkers and the Mondragon Corporation. This agreement was announced in a press release that was not favorable to ESOPs:

Highlighting the differences between Employee Stock Ownership Plans (ESOPs) and union co-ops, Gerard said, "We have lots of experience with ESOPs, but have found that it doesn't take long for the Wall Street types to push workers aside and take back control. We see Mondragon's cooperative model with 'one worker, one vote' ownership as a means to re-empower workers and make business accountable to Main Street instead of Wall Street."

The "Wall Street types" reference shows an incomplete understanding of ESOP companies in most closely held companies. Making this comment with a lack of understanding is consistent with the same Overly Sensational Anti-ESOP Coverage we saw with the Tribune ESOP coverage. To counter this misinformation, we are publishing a series of articles to highlight the many ESOP Benefits, including how ESOPs Increase Employee Wealth and Wages and Provide Greater Employment Stability and Increase Job Satisfaction.

The Employee Ownership Blog also discussed how the President of the US Steelworkers Criticized ESOPs.