Alice Rogoff, the rich lady who moved north with visions of publishing greatness only to buy and bankrupt Alaska’s largest and most influential newspaper, is now trying to negotiate her way out of trouble with the federal Bankruptcy Court.
An agreement filed with the court in Anchorage on Friday says Rogoff is to go into mediation with a Chapter 7 bankruptcy trustee and Northrim Bank “as close as possible to June 4” to “determine if a consensual resolution of the contemplated causes of action may be reached in order to avoid the expense and risk of litigation.”
That’s the legal way of saying an attorney for the trustee found ways in which she believes Rogoff improperly, possibly illegally, redistributed Alaska Dispatch News/ADN assets to the detriment of creditors before filing for bankruptcy in mid-August of 2017.
Rogoff’s bankruptcy filing left her creditors, many of them small businesses, out about $2 million. Rogoff subsequently filed claims saying she was personally owed about $23 million that she loaned ADN to keep it afloat. Her bankruptcy attorney then argued it was a waste of money for the bankruptcy court to fund an investigation into ADN finances because most of any funds recovered would go to Rogoff.
Creditors seldom get all of what they are owed out of a bankruptcy. What money is recovered – usually from the sale of property, buildings and equipment – is distributed among the creditors on a percentage basis. Given that Rogoff claimed approximately $23 million of $25 million in debt, she theoretically stood to collect more than 90 percent.
And given that at first it appeared the ADN didn’t have much in the way of assets – some old motor vehicles, some leftover newsprint, a photographic drone – the argument to close the bankruptcy proceedings and be done with it appeared to have some merit.
Only it turned out the situation wasn’t that simple, starting with the fact ADN had made about $2 million in payments to Northrim Bank on a personal loan the bank provided Rogoff to help finance the purchase of the newspaper.
That was a no-no. That was ADN company money, not Rogoff money.
Rogoff’s attorney’s tried to kill a probe of the payments, but Bankruptcy Court Judge Gary Spraker rebuffed him.
“…How Northrim expected to be repaid a $13 million (personal loan) is a legitimate area of inquiry for this estate,” Spraker wrote…. “The financial information obtained, and relied upon by Northrim clearly relates to a number of possible claims including constructive or actual fraudulent conveyance or some variation of breach of fiduciary duty.”
The latest filings are woefully short on details, but given that Northrim is a party to the talks it is probable those payments are in the discussion. Former Alaska bankers have told craigmedred.news they believe Northrim might have badly exposed the bank to a big loss by taking Rogoff at her word that she was good for the $13 million because, at the time, she was married to David Rubenstein, one of the richest men in the country.
They are now divorced, but it is widely believed the settlement made Rogoff a multimillionaire. She has pumped some of the money into ArcticToday.com, a top-of-the-globe knockoff of the old AlaskaDispatch.com. It even employs some old Dispatch staff.
Rogoff went bust in print journalism in a way that President Donald Trump would describe with one word: Yuge.
As the manager of the Dispatch News, Rogoff was failing even before she changed the name of the McClatchy-Company-owned Anchorage Daily News/ADN.com to Alaska Dispatch News/ADN.com three months after she bought the operation in 2014.
Most of Rogoff’s advisers at AlaskaDispatch.com told her the $34 million she was paying for the venerable newspaper was too much. Rogoff refused to listen.
AlaskaDispatch.com, of which Rogoff became the majority owner, was a news-market successful internet start-up that never quite reached profitability. The Dispatch News was a train wreck.
In the months immediately after the sale, Dispatch co-founder, minority Alaska Dispatch shareholder, and the new vice-president of the Daily News, Tony Hopfinger, tried to advise Rogoff she needed to reduce staff and trim costs to make the operation viable. Rogoff refused to listen and expanded staff.
After she changed the name to the Dispatch News and brought in new help to run the business side of the company, Rogoff was told there was no way to generate revenues to meet existing costs. Rogoff refused to listen.
Her VP for advertising was soon gone. Hopfinger wasn’t far behind. Rogoff fired him because he failed to adhere to her mantra: “we can’t cut our way to success.”
She then refused to pay him the remaining $900,000 of $1 million she’d promised to buy out his remaining interest in the company he’d started. Rogoff and Hopfinger are now locked in litigation making its way through the Alaska court system.
After Hopfinger left, Dispatch problems only grew. Attempts to build a new printing plan in Midtown Anchorage – Rogoff had sold the old one along with the Anchorage Daily News building to help finance the newspaper purchase – hit roadblocks, and the company spiraled downward from there.
At the time of the original bankruptcy filing, Rogoff suggested her financial problems were the fault of GCI Inc., the Anchorage telecommunications company that took her to court on Aug. 11, 2017 after she refused to pay her rent and the bill for the electric power that had been keeping her newspaper’s presses running in the GCI building on Northway Drive.
She later added the Binkley family of Fairbanks to the conspirators out to sink her dream of becoming an Alaska publishing tycoon. Unsuccessful in a bid to buy the Fairbanks Daily News-Miner in late 2015, the fifth-generation Alaskans, who run a highly successful Interior tourism business, approached Rogoff when they heard her newspaper was having financial troubles in 2017.
The “Binkleys and (Ron) Duncan, of GCI, ‘worked in concert’ to force her to sell the ADN with GCI starting the process through its filing of the eviction notice,” Jeannette Lee Falsey, a former reporter at the Anchorage Dispatch News working on a story for Columbia Journalism Review, would later report her old boss claiming.
But there were those in Anchorage, among them employees of the Dispatch News, aware of the newspaper’s deep financial problems for six months or more before GCI filed its notice.
In the spring of 2017, rumors circulated that a cash-strapped Rogoff told the business office at the ADN to “just stop paying bills” to save money. Though the failing ADN was one of the biggest business stories in the state at the time, that information went unreported for months.
By then, ADN was already in a death spiral, but Rogoff dismissed the suit with Catalyst as an everyday squabble between businesses, and the media moved along. She largely managed to keep the ADN story out of the news until GCI filed suit.
What was going on in the months just before the bankruptcy and even before has piqued the interest of Seattle-based bankruptcy attorney Christine Tobin-Presser, who was hired to help trustee Nacole Jipping investigate.
The Northrim loan payments are clearly in the mix. Whatever other questionable business practices were engaged in by Rogoff, the Moon and Stars and AK Publishing – or the “Rogoff Entities” as the court now calls them – are unknown, but the mediation agreement refers to “a variety of asserted causes of action against the Rogoff Entities and Northrim Bank.”
The agreement marks the first public indication in court documents that Northrim might also have legal problems.. The bank first loaned $13 million to Rogoff, and then apparently converted the personal loan to a company loan, and finally – late in the game – acquired the assets of the Dispatch News as collateral.
It has been suggested that Rubenstein might have been a co-signer on the original loan to Rogoff, but her attorneys have fought like crazy – and so far successfully – to keep the loan information out of the public eye.
And through all of this, Rogoff has largely seen herself as a victim in the failure of the Daily Dispatch. She told friends that Alaskans let her down by failing to embrace the newspaper while she owned it.
“I believe the Binkleys and GCI together decided to force me to sell and the only recourse I had was to go into bankruptcy,” she told Falsey. “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.”
“I could be wrong. Maybe they didn’t like the color of my hair.”
There as been no obvious sign of boosterism since the Binkleys took over the newspaper in the fall. There have been a lot of stories about a scourge of crime in Anchorage. That could be viewed as the opposite of boosterism.