The implosion of Alaska’s largest newspaper is old news now, but the story of the rise and fall of Alice Rogoff and her dream to create a media empire in the 49th state is far from finished.
On a gloomy Friday 10 days shy of Christmas, with a light snow falling in downtown Anchorage to render a dark and overcast day only darker, Rogoff’s attorneys were back in Federal Bankruptcy Court trying to protect the 66-year-old ex-wife of one of the nations’ richest men from herself.
They weren’t having much luck.
Bankruptcy Court Judge Gerald Spraker listened patiently to arguments from Rogoff lawyers suggesting creditors seeking a detailed investigation of the finances of the now defunct Alaska Dispatch News were really just trying to manuever into position to get at Rogoff’s new-found wealth from a week-old divorce.
Then the judge told them simply that it was “fully reasonable…to investigate assets that may or may not exist.”
“I have no idea of where (this) is going to go,” he added.
Rogoff, who this spring told friends she was going broke running the failing Dispatch News, is newly wealthy again. Only a week ago she divorced financier hubby David Rubenstein, whose worth is estimated at $2.8 billion. Rogoff wanted half, but they married in Montgomery County, Md., back in 1983, and Maryland is an “equitable distribution state,” not a common-property state.
Rogoff had no legal entitlement to an equal share of Rubenstein’s staggering wealth, but she is thought to have done nicely to the tune of hundreds of millions of dollars.
Her old friend Cabot Christiansen, the bankruptcy attorney for her failed newspaper enterprise, is now clearly worried an investigation into Dispatch News finances could turn into an investigation of Rogoff.
He spent a lot of time in court on Friday frowning, fidgeting and trying to convince his old law partner, now the judge, there just wasn’t any reason to spend time digging around in the financial wreckage of the Dispatch News.
Spraker waved him off.
“Everyone knew this was coming,” the judge said. “There are whole host of factual and legal” issues that need to be sorted out.
Christiansen particularly didn’t like the idea of bankruptcy trustee Nacole Jipping asking to bring in the high-power Seattle law firm of Bush Kornfeld LLP to probe what Christiansen termed “avoidance actions” surrounding the millions of dollars Rogoff got from GCI, the Anchorage telecommunications and cable company, to help close a $34 million deal to buy the Anchorage Daily News from The McClatchy Company.
Rogoff had nearly $20 million of the money she needed for that purchase thanks to a $13 million loan from Northrim Bank and cash she told some friends came from Rubenstein. The latter can’t be verified, but the loan from Northrim has been the subject of much discussion throughout the bankruptcy proceedings as an attorney for the bank has scrambled to make sure its interest is protected.
Wherever Rogoff was getting the money to add to the Northrim loan, she still needed another $14.5 million to buy the newspaper she had coveted almost since her move to Alaska from upscale Chevy Chase, Md., a decade ago.
To seal the deal, the Dispatch News LLC, one of Rogoff’s many limited liability companies, agreed to sell the 125,000-square-foot Daily News building on Northway Drive for $14.5 million to GCI, the Anchorage-based cable and telecom company.
The money from that sale should have been a Dispatch News company asset, at least temporarily, but it’s unclear whether the money ever went to the company.
James Lister, another attorney Rogoff has now hired to represent her, filed a motion in bankruptcy court arguing that the transfer is no big deal. Documents, he wrote, make it clear “that the building sold to GCI in May 2014 was not in any real sense the property of ADN before the sale, contrary to the trustee’s understanding. Rather, the property belonged to the prior owner of ADN, who deeded it to ADN just a few days before the sale of the building to GCI, meaning ADN’s fleeting temporary ownership was just an intermediate step in the transaction.”
Given this, Christiansen objected to what is called a Rule 2004 examination and accused Bush Kornfeld of maneuvering behind the scenes for a chance to dig into the finances of Rogoff’s bankrupt company, which left almost 200 debtors holding about $2 million in unpaid bills.
Rogoff herself claims she’s owed far more – $16.6 million to be exact – that she loaned the company to keep it afloat.
Christianson accused Bush Kornfeld of “ghost writing” court documents filed by Bill Artus, an Anchorage attorney working for Jipping on the case.
“I know Mr. Artus’s writing style,” Christiansen insisted.
Lister, who phoned in his appearance in court as did Bush Kornfeld attorney Christine Tobin-Presser, joined Christiansen in objecting to the bankruptcy court opening the door on a hunt for Rogoff.
“Obviously, Ms. Rogoff is the target,” he said.
Tobin-Presser assured him that was not the case, but she didn’t do much to eliminate the feeling Rogoff could become the target. Rogoff’s collection of LLCs and her personal finances are a tangle.
Dispatch News bankruptcy records show the company paid to fix her house and cover the cost of aviation gas on those occasions when she flew her single-engine float plane from Anchorage 225 miles south to Halibut Cove near the end of the Kenai Peninsula to hang out with former state Sen. Clem Tillion, one of her new Alaska best friends, and his family.
The flights to Halibut Cove ended when Rogoff crashed her airplane there, but she somehow miraculously swam away.
The mixing of personal and business expenses on company accounts could be a problem for both the company and for Rogoff. She has paid a lot of money to attorneys at the law firm of Birch Horton Bittner & Cherot since arriving in the state, and it could be hard to sort out what was personal and what was legitimate company business for one of her many interconnected companies.
Lister, the new personal attorney joining her side for the bankruptcy proceedings, is a Birch Horton Bittner & Cherot attorney from the company’s Washington, D.C. office. Another Bittner attorney is defending Rogoff in a lawsuit filed by former Dispatch News Vice-President Tony Hopfinger, who is suing for $900,000 of $1 million Rogoff promised to pay him for his interest in AlaskaDispatch.com, the company he co-founded with ex-wife Amanda Coyne.
It was AlaskaDispatch that give Rogoff her entre into Alaska journalism when she bought a majority interest in 2009. Dispatch became the vehicle that helped her along the road to acquiring the Daily News.
Bittner partner William H. “Bill” Bittner is a longtime Rogoff confidant and sometimes sidekick. He was in court looking somber on Friday along with Margy Johnson, the one-time Dispatch VP who filled the role of personal assistant to Rogoff and sometimes connection to Alaska Gov. Bill Walker.
They were all alone in the center of the Old Federal Courthouse court room that had been packed at the height of the media frenzy over the Dispatch News collapse. The only mainstream reporter who has tracked the story since is Naomi Klouda of the Alaska Journal of Commerce. She was in the courtroom along with Jipping, Christiansen, electrical contractor Mark Miller and Erik LeRoy, an attorney who represents the Binkleys. They now hold most of the Dispatch News financial records and emails.
Tobin-Presser wants to go through much of that material. Christiansen tried to sound helpful in arranging for that to happen without being very helpful at all. There was considerable discussion of how to find Birch Horton invoices in the ADN’s filing system, and a protest from Rogoff’s attorney wanting a “protective order” to keep secret any privileged communications between her and her personal attorneys as well as documents involving other businesses.
“I believe I have lost control of this hearing,” Spraker finally objected, before reasserting his control and authorizing Tobin-Presser to proceed with the 2004 examination. The judge ordered everyone to work with her to provide whatever documents she said she needed.
Tobin-Presser is working on commission. Bush Kornfeld collects only if she finds assets the court decides are fair game for creditors. Miller is one of those creditors, and the only one who showed up for the hearing. His company is out about $500,000 for work the Dispatch News ordered on a new printing plant in Midtown before the company abandoned that failure.
Miller had no comment after the hearing, but he was smiling.
Tobin-Presser expected that once she had completed he review of the documents she’d have a few questions for Rogoff.
“The debtor is going to be required to appear,” she said.
Where Rogoff is at the moment is unclear. Along with the home in Chevy Chase, the Rubensteins owned homes in New York, on Nantucket Island and in Palm Beach, Fla., and elsewhere. But it is unclear who got what in the divorce.
Rogoff personally owns a $1.5 million home on Campbell Lake in Anchorage, and co-owns a vacation home in the San Juan Islands of Washington state with Christiansen and his wife.