The flow chart for Alaska Dispatch News finances/Federal Bankruptcy Court

The carcass of the now dead Alaska Dispatch News was dragged back into federal Bankruptcy Court Thursday with the wolves of the law sniffing still edible meat on the bones of what is now being called the “Rogoff Entities.”

Former News owner Alice Rogoff, it appears from court records, engaged in a  sweetheart deal that had the Dispatch News paying interest and apparently in one case a big chunk of principle on her personal, $13 million bank loan from Northrim Bank.

Christine Tobin-Presser, a Seattle lawyer working for the Bankruptcy Court trustee, is investigating what appears to be Rogoff’s use of company money to benefit Rogoff. Millions of dollars are potentially involved.

Whose responsible if the Bankruptcy Court tries to claw the money back to pay off more than 150 Rogoff creditors, many of them small businesses, is unclear. The creditors are owed close to $2 million.

Northrim Bank is still owed about $10 million and has been obfuscating the bankruptcy probe at every turn. It appears to have known the Dispatch company was paying off what was Rogoff’s debt.

Rogoff herself could be held responsible. Recently divorced from former husband David Rubenstein, one of the richer men in the country, she is now thought to be worth tens of millions of dollars, if not more.

One of her several personal attorneys and Dispatch News bankruptcy attorney Cabot Christiansen, an old Rogoff friend, have tried to protect her from liability by claiming she is the biggest creditor in the Dispatch bankruptcy. By Christiansen’s accounting, the sometimes Washington, D.C. socialite – despite her dislike for her estranged husband Rogoff loved to be seen on his arm at Kennedy Center galas – lost almost $17 million on her Alaska news adventure.

Biggest loser

As a $17 million loser, she would normally be owed the biggest chunk of any Dispatch News money recovered by the court. Theoretically,  she stands to collect about 90 percent of anything the court decides should have stayed with Dispatch instead of going to pay her private debts.

If the court were, for example, to order $5 million is owed Dispatch, Tobin-Presser’s law firm would take a big cut as their contingency fee for the recovery, and Rogoff would normally be entitled to the lion’s share of what’s left with other creditors dividing up the scraps on a percentage basis of what they are owed.

Christiansen actually tried to torpedo the Tobin-Presser probe by arguing Rogoff was really the only one who had much to gain by bringing in a high-power Seattle attorney on contingency to try to straighten out the tangled Rogoff Entities.

But it’s not a given that all recoverd money goes to someone claiming to be the biggest debtor.  Judges in bankruptcy cases have some latitude to alter the normal rules.

“Where it is necessary to prevent fraud or to enforce equity, the bankruptcy court will disregard a corporate entity and hold individuals liable for corporate obligations,” attorney John H. Anderson wrote in an advisory column for the website Manufacturers & Agents.  “These individuals may include the owners of the corporation (called shareholders), the corporation’s directors, and the corporation’s officers.

“The corporate veil is often pierced:

• “Where the corporation ignores corporate formalities such that it may be considered the ‘alter ego’ of either the shareholders or another corporation (this situation can arise where shareholders treat corporate assets as their own or otherwise fail to observe corporate formalities and some basic injustice results therefrom).
• “Where the corporation was undercapitalized at the time it was formed such that there was not enough unencumbered capital to reasonably cover prospective liabilities.”

The Dispatch News was undercapitalized from the beginning, and Rogoff – the sole shareholder – sometimes treated the comany like her private bank account. A financial statement for last year shows the company paying more than $127,000 in her legal fees and covering her personal expenses to the tune of thousands more.

Rogoff has argued she balanced it all out at the end of the year when the Dispatch News drew up a promissary note that was to pay her back for all the money she dumped into the company the previous year. Her spending was deducted from that note before it was finalized, according to the ADN.

Burka

GCI, the Alaska telecommunications and cable company, which owns the building in which the Dispatch News’ press was housed, and former Dispatch News president and AlaskaDispatch.com co-founder Tony Hopfinger, famous for a napkin contract-buyout Rogoff is now refusing to honor, are both in state court trying to shatter what they say is the corporate veil behind which Alice Rogoff Inc., or what Tobin-Presser called the Rogoff Entities, is trying to hide.

Attorneys for Rogoff, Northrim and Wells Fargo bank were jockeying before Spraker on Thursday with a lot of them seemingly worried Tobin-Presser might stumble into information irrelevant to the finances of he Dispatch News while digging around in Northrim and Wells Fargo accounts that seem to have been used by both the Disaptch and Rogoff. The hearing was eventually continued until the end of the month.

“The Rogoff entities (Alice Rogoff; the Moon and the Stars, LLC; Alaska Publishing LLC, Alaska Dispatch Publishing LLC; and other companies directly owned by Alice Rogoff other than debtor Alaska Dispatch News LLC – collectively the ‘Rogoff Entities’) have expressed concern that, as a result of the transfer of the debtor’s computer systems to the Binkley Company as part of the sale, certain emails or other documents outside the scope of Federal Bankruptcy Rule 2004 discovery as sent forth in Rule  2004 (b), sent or received by Alice Rogoff in her personal capacity as a representative of the other Rogoff Entities (and not in her capacity of as a representative of the Debtor) may have unintentionally been transferred to the Binkley Company,” Tobin-Presser wrote in a June 12 stipulation filed with  the court.

Tobin-Presser promised to keep confidential any information she found not related to the finances and fiscal liabilities of the Dispatch News. An attorney for Rubenstein had expressed concerns about what might be revealed as a result of the bankruptcy investigation, but appears to have been placated by Tobin-Presser’s statement.

Others might also be breathing a sigh of relief. Former Rogoff confidants say they believe the computer files are likely to contain a significant number of emails between Rogoff and her friends Gov. Bill Walker and Lt. Gov. Byron Mallott.

As publisher of the ADN, she was told by several advisers that it was not a good idea to be sending emails to the governor and the lieutenant governor. Rogoff was and is a political and fiscal adviser to Walker and an old friend of Mallott’s. She was one of those who helped join one-time Democrat gubernatorial candidate Mallott and independent Walker in a “Unity Ticket” that unseated Republican Sean Parnell, a man Rogoff didn’t like.

The Binkley Company is the Fairbanks business that bought the Dispatch News and changed its name back to the Anchorage Daily News. Rogoff told the Columbia Journalism Review that the Binkley’s and Duncan, the founder of GCI, “worked in concert…to force me to sell and the only recourse I had was to go into bankruptcy. I think at the end of the day it was probably political. The management of GCI wanted to see the paper in the hands of people with conservative state politics. There is a sizable group of business people in Anchorage who believe the role of a newspaper is boosterism. Ron Duncan is one of that group. Time will tell whether the Binkleys are as well.”

Prior to that outburst, Rogoff claimed to be a “Romney Republican” and wrote a column for her original Alaska publication – AlaskaDispatch.com – that would have made the biggest of Alaska boosters blush.

Booster’s booster