When Alaska Dispatch News owner Alice Rogoff cut a complicated deal to transfer her bankrupt newspaper to the Binkley Company a little over a week ago, a couple of pieces of the Dispatch empire somehow slipped quietly out the door.
No one has said anything about them since the sale was announced, but an Anchorage attorney is now raising questions. Don Mitchell wonders if it was legal for Rogoff to remove the news website ArcticNow.com and the travel website ShowMeAlaska.com from the company just before the Dispatch News filed for Chapter 11 bankruptcy.
Neither website appears to be worth much at the moment, but back when Tony Hopfinger was president of Alaska Dispatch he said Rogoff told him she was confident ArcticNow “would make millions.”
Mitchell notes 11 USC 548(a)(1)(A) of the federal bankruptcy code says debtors – which in this case would be Rogoff – can’t move a company’s assets around “within two years before the date of the filing of the petition, if the debtor (Rogoff) voluntarily or involuntarily made such transfer or incurred such obligation with actual intent to hinder, delay, or defraud any entity to which the debtor was or became” indebted.
The value of website domains is highly debatable. They are worth only what a buyer is willing to pay, but those numbers can be surprisingly high.
Insurance.com sold for $35.6 million in 2010, and when was the last time you clicked on that?
The serious bidding wars for websites appear to have ended a couple of years ago when Qihoo, a Chinese company, paid S17 million for 360.com, but there is still some big money being spent on domain names.
Fly.com went for $2.89 million in April of this year, and Freedom.com went for a reported $2 million in May.
Arctic Now might lack for high cash-value at the moment, but it has scored big in influence for Rogoff.
“Starting a new online newspaper with Obama friend,” Norway’s Nord 24 headlined last October above a photo of Rogoff and the publisher of the Barents Observer. Obama was then still president and expectations were that he would soon be followed into office by then-Secretary of State Hillary Clinton.
“(Arctic Now) owner is American media director Alice Rogoff, who owns Alaska Dispatch News,” said the story below. “She has a background from Washington Post, has worked for former president Jimmy Carter and is a good friend of Barack Obama.”
The departure from the Dispatch News of Arctic Now, along with the travel website, was first revealed two days after the Saturday night revelation the state’s largest newspaper was filing for Chapter 11 bankruptcy protection.
Thirteen graphs deep in a story headlined “New Alaska Dispatch publishers reassure staff on future,” it was revealed that “two smaller operations developed under Rogoff, the news site ArcticNow.com and the travel site ShowMeAlaska.net, will be spun off from the paper and operated by Rogoff after a sale.”
There has been no mention of the properties since.
Mark Miller, the owner of an electrical company the Dispatch News owes almost $500,000, wonders how it is that he can’t get paid, but Rogoff can walk away from the bankruptcy with her most prized, journalistic possessions.
Arctic Now is a Rogoff creation. It lists her as publisher. It furthers her desire to influence Arctic affairs that started with the creation of the Arctic Circle Inc. in 2013 with friend Ólafur Ragnar Grímsson, the president of Iceland.
Rogoff has been a player in the Arctic ever since.
Miller doesn’t think Rogoff should be able to tear one of the organs that help her peddle influence out of the bankrupt Dispatch News and take it with her when she leaves. It is enough, he said, that it appears to be worth much to her, but she has also expressed the opinion Arctic Now is valuable and not just to Hopfinger.
“I believe people will be willing to pay for news and analyses from the Arctic, particularly if we can give it to them in their own language, “says Alice Rogoff, publisher of Alaska Dispatch News and the ‘godmother’ of this unique cooperation, ” High North News reported in October. “Arctic Now will soon be published in Russian and Chinese in addition to English, and hope to attract new audiences across borders.”
Arctic Now is to Rogoff’s Arctic adventure what Alaska Dispatch News was to her Alaska adventure, at least before she bankrupted the latter.
Miller can’t believe a bankruptcy court would let her run one company into the ground, stiff him to the tune of almost $500,000, and then dance away with a subsidiary company. It just doesn’t seem fair. But to Miller, a lot doesn’t seem fair.
The Dispatch News ordered up about $1 million in work with his company over the winter to prepare an old, oilfield service building on Arctic Boulevard for installation of a new press shipped north from Indiana and old press it moved over from the former Anchorage Daily News building on Northway Drive.
About half of the bill for that work was paid to Miller’s M&M Wiring in the spring. Then the payments stopped. Miller was never told why.
When he sent Rogoff an email asking for an explanation, he got a response from one of her gang of attorneys at Birch Horton Bittner & Cherot threatening a harassment suit if he ever tried to contact the owner/publisher of the Daily News again.
Miller told his attorney to slap a lien on the building, though he didn’t want do so to, and filed suit against its owners. He has no animosity toward Arctic Partners of Tacoma, Wash., which leased the building to Rogoff, but they own the only asset he can lien.
Miller said that he believed that when Ed McCoy, a Dispatch employee, and later a Birch Horton Bittner lawyer ordered him to do work on the building, they were acting as agents of Arctic Partners.
That the owners never said otherwise made them legally liable under Alaska law. Worried about getting caught in the same predicament as Arctic Partners, GCI earlier this year plastered the entrances to its building with warnings it was not liable for the costs of any work ordered by Alaska Dispatch.
The now-GCI building, the former ADN building, holds the ADN’s only working press. The two presses in the building on Arctic are inoperable, and the news lacks the needed city permits to work there.
Meanwhile, GCI and ADN are due in state court today at 10 a.m. for a hearing on GCI’s request for court authority to evict the newspaper for unpaid rent, unpaid utilities, and penalties totaling about $1.4 million.
GCI is also trying to force Rogoff out from behind what it calls a “corporate veil” of companies – Alaska Dispatch Publishing LLC, The Moon and the Stars LLC, and AK Publishing LLC. GCI contends those limited liability companies are independent entities in name only.
In reality, it argues, they are all Rogoff, and the only reason they exist is to try to protect her from legal liability. GCI wants a judge to knock them down and allow it to go after Rogoff personally to try to get the $1.4 million it is owed as landlord and another $1.5 million or so necessary to cover the cost of removing the Dispatch News press, which Rogoff contractually promised to do.
If GCI can knock down the LLCs, it has a much better chance of collecting something from Rogoff than it is likely to collect from the Dispatch bankruptcy. The bankruptcy funds now look like zero.
The deal Rogoff cut with the Binkleys would pay the Dispatch News up to $1 million, but that is contingent on the bankruptcy court approving a debtor-in-possession loan from the Binkleys to Dispatch News in the same amount. The newspaper, which is losing $125,000 per week, is now so short on cash it needs that loan to keep printing until it comes out of the Chapter 11 bankruptcy reorganization in a month or two.
The Binkley plan is to manage the company for Rogoff during the interim period using the money it loaned. On emerging from bankruptcy, the Dispatch News would use the Binkleys’ purchase payment to repay the loan.
So, to simplify, the Binkleys would pay nothing for the company. As a result, there would be no funds available to creditors. And though this might sound like a sweetheart deal for the Binkleys, the reality is something else.
They would get the Dispatch News for free, but would be immediately facing a cost of $500,000 to keep it alive for the next month, and who knows how much in future costs before they could pare it down to a company that revenues can support.
What is she worth?
Whether creditors would fare any better if GCI can rip that corporate veil off Rogoff is an unknown. Her sworn declaration to the bankruptcy court says she has a $10.2 million debt to Northrim Bank coming due on Sept. 30.
If anyone knows her net worth, they’re not talking.
It is unclear whether she has access to the funds to cover the Northrim loan. Northrim has appeared very nervous at bankruptcy proceedings, and the bankruptcy court had to approve a payment from the Dispatch News to Northrim to cover the interest on Rogoff’s loan.
As of July 31, her sworn declaration said, she owed Northrim interest “in the amount of $81,459.25, and attorneys’ fees (through June 30, 2017) of $11,597.00.” Why she owes the bank attorney’s fees was not explained.
Those documents also revealed that in March, Rogoff granted Northrim Bank more security on her loan in the form of “interest in the assets of ADN, a pledge agreement of the monies received by me from the marital settlement agreement (with billionaire husband David Rubenstein), and a security interest in my personal investment accounts at Wells Fargo Bank.”
It was about a month earlier, Dispatch News sources have said, that Rogoff ordered the company to stop paying bills because Rubenstein told her he wanted a divorce or was filing for a divorce. No divorce filing can be found anywhere, but it is clear from Northrim’s actions that something happened in February or early March.
The Washington Post reported the Rubensteins are not filing for divorce. Rubenstein has not responded to an email sent days ago asking for comment.
The bank would have known almost immediately if Rubenstein cut off payments to Rogoff. Her declaration reveals, “all payments that I receive from a marital Settlement aagreement with my husband, David Rubenstein, were directed and paid into my account at Northrim Bank.”
It is that which makes the Dispatch News’ interest payment to Northrim appear odd. It would seem only logical that if Rogoff’s marital payments were funneled into an account at the bank, the bank would take payments out of that account if the money was there.
There are many questions still surrounding this story.
Attorneys for Northrim, Rogoff, the Binkleys and other creditors are due back in bankruptcy court at 3:30 p.m. today. They were huddling over the weekend trying to figure out a way to allow the Binkleys to make that much-needed loan to the Dispatch News to keep it going without undermining what little leverage creditors have on the company.
Without the Binkley loan, the life of the state’s largest newspaper could now be measured in a matter of days.
@Flyguy – The day the Binkley/Evans team owns the ADN, and Alice is out completely, is the day that I – and I am sure MANY others – restart my subscription. I wouldn’t pay Alice a dime for her rag-reporting, but I will pay someone for fair, balanced news.
They should schedule the auction in the next 30 days. BP, Conoco, Big Labor, and the Alaska Democratic Party could easily get into a bidding war and pay a measly $3 million – enough to pay the Binkleys and the creditors.
Also isn’t is ironic that the little guy gets stiffed but Shannyn Moore keeps getting a paycheck?
Alice needs to pay the creditors. $2 million is chump change in her world. I assume the personal debt to Northrim is also secured by her current and future estate. The real fly in the ointment here is likely negotiations with her husband the #132 richest man in the world. Alternatively, the husband and Alice are simply making it “appear” Alice has limited resources.
There is a web site, https://mysitewealth.com, where you can type in a domain name and get the estimated worth of the web site, based on Internet metrics. Give it a try. Web traffic and search statistics are used to come up with an estimate. I have no idea how accurate (or inaccurate) the results are. But perhaps the values relative to each other suffice for a comparison. Here is what you get when you type in the following domain names:
adn.com – $3,720,493
arctic now.com – $1978
showmealaska.net – $192
craigmedred.news is worth $2/a day
seems like a reliable source 🙂
A word that comes to mind after reading this article is abscounder.
3.7 Million for ADN?. Well, we now know how inaccurate the site can be. Perhaps there was a – (minus) symbol in front of the number that I missed.
What makes the Binkley / Evans consortium think they can publish a daily paper and not have the same financial challenges that Rogoff faced. You can only cut expenses so much. But cutting is not sustainable. You have to increase revenues. With the paper’s low circulation, and advertisers running, not walking away from ADN, what could new owners accomplish to keep this paper viable. Lots of other questions, too. Does the consortium have the deep pockets necessary to operate the paper during the first year or so? Because it will take several million just to get it back on its feet. Are they willing to spend that kind of money on a newspaper in today’s digital environment? Do they have the necessary experience? If I were them, I would be doing some serious reconsidering about now!
As for Rogoff! Very interesting that knowing that the paper was failing and that it would have to look for protection from the Bankruptcy laws, she spun off two pieces of property which undoubtedly have some value. These assets could have been added to the value of the Bankruptcy estate. This activity is tantamount to a “preference”, a legal term of art and unlawful. The judge should promptly set these transfers aside and put them, along with what ever other assets the paper has, on the auction block to help
pay the creditors.