In order for the ESOP to be created, an independent trustee must vet the transaction and make sure it’s fair to the employees relative to what Zell is getting, and also whether the price being paid by the ESOP is justifiable given the expected future profits of the company. Tribune said in a statement that there would be no change in the pension benefits previously earned by employees as a result of the transaction. The new ESOP will be funded solely through company contributions. It all may sound quite appealing, but there are several cases of ESOPs that went wrong, some spectacularly so. UAL Corp.’s United Airlines adopted an ESOP structure in 1994, but employees suffered steep losses after the company declared bankruptcy in 2002. Corey Rosen, an expert on ESOPs and the founder and executive director of the National Center for Employee Ownership, an Oakland-based nonprofit organization, says several missteps were made in the United case. Rosen pointed to several examples of successful ESOPs, including Publix Super Markets Inc., a fast-growing and highly regarded grocery chain based in Lakeland, Fla., as well as W.L. Gore & Associates Inc., the Newark, Del.-based maker of waterproof fabric Gore-Tex.160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! The new ESOP-owned Tribune will have roughly $13.4 billion in debt after the deal, Bear Stearns analyst Alexia Quadrani said, up from about $5 billion now. Real estate investor Sam Zell is contributing $315 million to the transaction and will wind up with the right to buy 40 percent of the company later. Since ESOPs act as a kind of retirement benefit plan, company contributions to ESOP plans are essentially tax-free. This allows the company to pay down the debt more quickly. As the debt is paid down, employees will gradually receive shares in the company as a benefit, and they won’t owe tax on those shares until they leave the company or retire and cash them out. What’s more, to the extent a company is owned by an ESOP program, profits aren’t taxed, either. NEW YORK – The deal announced Monday to take the Chicago-based media company private will result in Tribune being owned by an employee stock ownership plan, or ESOP. These plans have many advantages including significant tax breaks, but they also carry certain risks. An ESOP is a kind of benefit plan for employees in which the company contributes money, as it would to a pension or similar kind of retirement savings account. But instead of investing in stocks or bonds, as most pension plans might, an ESOP plan will use those contributions to pay down debt and buy stock in the company, which is then distributed to employees as a benefit.