Media

Cash-only please

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Alice Rogoff

The Alaska Dispatch News might be in bankruptcy, but owner Alice Rogoff, the estranged wife of one of the country’s richest men, apparently still has access to more cash than most working Alaskans.

Or at least she did as of Aug. 10.

It was on that date her bankruptcy attorney and old friend, Anchorage’s Cabot Christianson, said he received from Rogoff “a wire transfer to my trust account in the amount of $50,000 to serve as a retainer for services leading up to filing Chapter 11 and incurred during Chapter 11,” according to new federal Bankruptcy Court filings on Wednesday.

Dispatch filed for bankruptcy on the evening of Aug. 12. 

Two days earlier, the Dispatch News published its first hint that the state’s largest news organization was in serious financial trouble. The tease came 12 paragraphs deep in a story about Morris Communications selling some of its Alaska publications to GateHouse Media.

“Alaska Dispatch News is dealing with the challenges of the industry as well,” wrote reporters Annie Zak and Suzanna Caldwell. “ADN owner and publisher Alice Rogoff is ‘in discussions with several potential new investors’ in the company she told staff in an email last week.

“‘(W)e’ve been challenged by changing economic and financial circumstances to say nothing of evolving news reading habits,’ Rogoff wrote. Deliberations with potential investors ‘are private and must be kept that way, so I cannot comment on their status.'”

The reality at the time was that there were no discussions with investors. Rogoff was trying hard to sell Alaska Dispatch News/ADN.com and had been trying for months to do so.

A proposed dollar sale to the Fairbanks-based Binkley Company and a loan of $1 million from the Binkleys to Dispatch was revealed as part of the bankruptcy filing. The federal Bankruptcy Court has set a hearing for 9-11 to consider the sale of the Dispatch to the Binkleys for $1 million. They sale would zero out their loan and leave them in possession of a news operation on track to lose $8 million this year.

Despite the size of those losses, there are indications other buyers could show up at the hearing to try to outbid the Binkleys for the state’s largest news organization. Newspaper analysts believe that some sort of print news operation in Anchorage can be made profitable.

A wire transfer, for those unfamiliar with banking practices, is an electronic transfer of cash from one bank account to another bank account. Your bank takes the money out of your account and transfers it to someone else’s account.

Rogoff friends and former advisers say that on a personal level she might now be much better off than when the Dispatch News was bleeding her of cash. The latest bankruptcy filings show her as a creditor owed almost $13 million –  $12,761,660.55 to be exact – for her personal investments in Alaska Dispatch/ADN.com since buying the Anchorage Daily News/ADN.com from The McClatchy Company for $34 million in 2014.

Rogoff was apparently able to afford such lavish spending thanks to a “spousal agreement” with billionaire husband David Rubenstein, who lives back on the East Coast. 

Northrim Bank, to which Rogoff owes $10 million, has cited the spousal agreement in court filings, but the details have never been publicly disclosed. Friends and former friends of Rogoff, none of whom are willing to speak publicly, say she is provided $5 million per year in support.

That does not appear to have been enough to fully subsidize her complicated Alaska business adventures.

Christianson, whose family a decade ago joined Rogoff in creating a limited-liability company (LLC) to buy a home on Crane Island in Washington state, identified Rogoff in his latest filing as “the sole member of Moon and the Stars, LLC, which is the sole member of Alaska Publishing, LLC, which is the sole member of the debtor herein.”

The “debtor herein” is the Alaska Dispatch News, also doing business as ADN.com. Rogoff’s world is a tangle of LLCs. There is also a Dispatch News Publishing LLC of which AlaskaDispatch.com founder Tony Hopfinger is still shown as a 5 percent owner.

Hopfinger and Rogoff are locked in a nasty lawsuit. After the upstart Alaska Dispatch bought the Daily News in a wildly heralded deal  – “Salmon swallows whale,” headlined the Seattle PI – Hopfinger said he wanted a break from the grind with the news business.

He told Rogoff he’d help oversee the marriage of the Dispatch and the Daily News, and get the new Alaska Dispatch News/ADN.com running, but that he wanted her to buy out his interest in Dispatch Publishing in return. Rogoff agreed to pay him $1 million in $100,000 per year installments for 10 years.

To seal the deal, she wrote out a her promise on a napkin and signed it. She then made one payment and refused to pay more, citing the financial struggles of the Dispatch/ADN. Christianson told the bankruptcy court the company lost $5.8 million in 2015 and $6 million in 2016. It is on track to lose $8 million this year.

Hopfinger told Rogoff early on that she needed to cut costs. She wanted to grow the company instead in hopes that would produce more revenue. The plan didn’t work even though she poured gobs of cash into the newspaper and the Alaska economy before she decided she just wasn’t going to spend anymore.

Alaskans and others who the Dispatch News/ADN.com owes more than $2 million were left holding the bag when the subsidies ended. Most of them will probably never see their money.

Given this, her broken promise to Hopfinger – his lawsuit is steadily moving toward trial in a state court – and a history of ignoring contracts in general – GCI is suing Rogoff for not paying her rent – Rogoff’s credit rating in Alaska at the moment is poor.

Christianson might not be the only one doing business with her by wire transfer or cash only.

 

 

 

 

 

 

 

 

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