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The lawsuit filed against the Tribune Co., Sam Zell and others by current and former members of the Los Angeles Times has moved to a Chicago courtroom, the ChiTownDailyNews learned today. The suit, which was filed by Cotchett, Pitre & McCarthy in US District Court in California, states in part that Sam Zell orchestrated a complex financial transaction that used Tribune Co. pension assets to enrich Zell and other defendants.

In a hearing this week, Federal Judge Rebecca Pallmeyer ruled that the non-Tribune defendants should be prepared to proceed with their defense. The Tribune Co. is protected from further action due to the bankruptcy filing in Delaware.

Phillip Gregory, lead attorney for the case, told the ChiTownDailyNews that the plaintiffs will be determining whether and to what extent the Tribune Co. will remain a defendant and how to proceed against the other defendants in the action.

Saying he was surprised by the number of entities tied to Sam Zell revealed in the bankruptcy filing, Gregory said, “I'm not sure the employees, who Zell calls partners, knew he had so many entities involved in his 'scheme'.”

As noted in the media blog on December 13, there are 25 entities that hold warrants, but not equity in the Tribune Co. A warrant is a right to purchase equity that can be exercised later. Some of the entities also own liabilities. Basically meaning, the Tribune Co. owes money to them and they are creditors of the company in bankruptcy court.