Less than a year after former Alaska Dispatch News owner Alice Rogoff wrote a rather strange column describing her newspaper as being in “investment mode” and about 8 months before she took the company into bankruptcy, court documents now reveal the business was almost $1 million underwater and sinking fast.
It was news the newspaper was trying hard to keep out of the news. It would be a long time before Alaskans learned the state’s largest news organization was on the brink of going under, and shortly thereafter it would be in bankruptcy and sold to an old, Alaska family from the Interior city of Fairbanks.
When it was reported here in June that Catalyst Paper, a Canadian newsprint and ink supplier, had gone to court to try to get the Dispatch to pay its bills, the Rogoff-led Dispatch News dismissed the suit as the common sort of litigation that goes on between businesses.
The staff of the state’s largest news organization reported almost nothing about the start of the biggest business collapse in the state’s largest city until GCI, the state’s largest telecom and cable company, took Rogoff into state court to demand about $1.4 million in back rent and unpaid electric bills.
Thus began the public unraveling of a story that had for months been developing under the noses of the reporters and editors working for the state’s largest news organization.
Since then, a lot of the details of the collapse of the shining star of what has come to be called Rogoff Inc. have emerged in U.S Bankruptcy Court hearings that have dragged on since September 2017, but new tidbits are coming out in a lawsuit filed against Rogoff by M&M Wiring Service Inc.
M&M was hired to wire a new printing plant the Dispatch News planned in an industrial section of the city’s Midtown. It claims in its court filings that it was defrauded by Rogoff and her associates.
Beginning of the end
Informed of cash-flow problems and the need to come up with more than $1.3 million to cover outstanding bills by the end of January 2017, M&M court filings say, Rogoff told her staff to simply stop paying some bills, including those of M&M.
“It was after this point in time, now that Alaska Dispatch was unable to pay M&M, that Rogoff sent M&M’s invoices to Adam Cook (an attorney at the firm Birch Horton Bittner & Cherot) to review as they were ‘suddenly” a ‘way-inflated cost,'” the complaint says. “Rogoff was asked what should be paid, a Precision Maintenance & Fabricating invoice, a M&M invoice or the Premera monthly premium.”
Premera was the company providing health insurance coverage for all Dispatch News employees. It got paid.
Rogoff opted against paying M&M. The small, Anchorage company was eventually left holding the bag on almost a half million dollars due from Rogoff when she took her newspaper into bankruptcy eight months later.
It’s suit seeks compensation from Rogoff, Alaska Dispatch News, and Arctic Partners LLC, the owner of the old, oilfield services warehouse in Midtown Anchorage that Rogoff was trying to renovate as a much-needed new home for the ADN. But it has become clear from the emotions displayed by M&M owner Mark Miller at Bankrupcy Court hearings that he holds Rogoff primarily responsible for the difficulties his business faced.
A 98-page amended complaint filed in conjunction with his case earlier this month accuses the 67-year-old, former Washington, D.C. socialite of “fraud and/or an unfair business practice(s).”
“Rogoff and her agents…retained M&M to perform almost a million dollars in electrical work (labor and materials) to the Arctic Partners buildings and continued to promise to pay M&M in order to keep them working on the project knowing that the debtor was losing nearly a half a million dollars a month and could not pay what it owed to M&M and continued to direct M&M to perform work despite having hired a replacement contractor(s),” the complaint says.
The complaint details all sorts of alleged misbehavior on the part of Rogoff and associates.
Birch, Horton, Bittner
Cook, the complaint says, “represented himself as an agent of M&M to the Municipality of Anchorage and transferred M&M’s electrical permit…without any permission or authority from M&M.”
The Birch Horton law firm has long represented Rogoff.
With Cook tangled in the M&M affair, company principal Bill Bittner finds himself caught in different litigation between Rogoff and former Dispatch editor Tony Hopfinger. Hopfinger is suing Rogoff for $900,000 of the $1 million she promised to pay him for the online-only news site Alaska Dispatch.
That case is slated to head to trail this week.
Hopfinger started Alaska Dispatch with ex-wife Amanda Coyne. Rogoff later bought controlling interest. Bankrolled by Rogoff, Hopfinger and Coyne built the Dispatch into what the Columbia Journalism Review described as a “regional reporting powerhouse.”
That set Rogoff up to begin discussions with The McClatchy Company about buying the Anchorage Daily News, her much bigger competitor in the Alaska news market. A California-based company, McClatchy had been struggling since buying the bigger Knight-Ridder Inc. newspaper chain for $4.5 billion in 2006.
It continues to struggle as what was once a vibrant market for news on print disappears into the tubes. The owner of 30 large and medium-sized daily newspapers from the Miami Herald in Florida to the Kansas City Star in Flyover Country to the mothership Sacramento, Calif., McClatchy revenues fell 7.5 percent in 2016 with a print ad loss of 20.6 percent in the fourth quarter, Politico.com reported last year.
McClatchy could hardly resist a $34 million deal with Rogoff for a paper that was probably worth closer to a third of that. Over the objections of Hopfinger and other advisers, who said the Daily News price was too high, Rogoff bought and promptly rebranded the Alaska Dispatch as the Alaska Dispatch News so as to maintain the large, online presence of ADN.com while merging her old news operation with the Daily News.
Hopfinger oversaw that merger while negotiating with Rogoff’s lawyers on selling his interest in the company. They settled on a $1 million deal. When Rogoff balked at formalizing the agreement, Hopfinger pressed her for something more than a promise, and she wrote out a pledge to pay $100,000 per year over 10 years on a cocktail napkin, then signed and dated it.
She’d done a similar napkin deal with Hopfinger and Coyne to buy the Dispatch. That napkin is now forgotten. The Hopfinger napkin has gained a small bit of infamy and is at the center of Hopfinger-Rogoff lawsuit.
Rogoff has since suggested the whole affair stems from Bittner acting as a rogue agent in trying to negotiate a buyout of Hopfinger only to have a state court judge defend the attorney. The one thing that is clear is that Rogoff generated a lot of billable hours for Bittner’s law firm.
The mess in Midtown
Cook’s takeover of oversight on the Rogoff construction project came just before the Dec. 29, 2016 termination of M&M, which came just days before the Municipality of Anchorage slapped a stop-work order on the project, according to the M&M complaint.
The stop work order accused the Dispatch News of working on the new print plant without approved drawings and plan review.
Miller, who has been among the creditors angriest about Rogoff’s taking the ADN into bankruptcy, takes a direct shot at her involvement in that hot mess in the complaint.
“Rogoff held herself out as knowledgable and having a background in finance with the specialized knowledge and expertise to run and operate a newspaper business in a profitable manner,” Miller attorney Wayne Dawson wrote.
“Rogoff’s claims were untrue and known to be untrue by Rogoff and her agents at the time she knew (M&M) and others were relying on said representations and the image she put forth in the community.”
Rogoff’s resume says she has an MBA from the Harvard Business School and experience as the chief financial officer for U.S. News & World Report magazine and as an assistant to former Washington Post publisher Donald Graham.
All she managed to do in the Alaska news business was lose money. Lots of money.
Rogoff claimed $23 million in losses in her approximately three-year ownership of the ADN, and her actual losses might have topped $30 million. Most of the money came from once estranged and now former husband David Rubenstein, one of the richest men in the country.
The Miller filings note Rogoff’s admission she somehow planned to spend her way to business success. In federal Bankruptcy Court, the complaint says, she admitted she was “willing to operate the ADN at an operating loss both to maintain robust journalism” and ensure ADN “maintained its position as the dominant online news source in Alaska.”
The complaint then goes on to add that Rogoff did that “to the detriment of M&M. These practices…offend the public policy, are immoral, unethical and unscrupulous, and have caused substantial injury to M&M and others.”
Included in the M&M filings are copies of emails between Miller and Ed McCoy at the Dispatch News. McCoy was in charge of the construction project before Cook took over.
During bankruptcy hearings, Rogoff described him as her “friend and dog sitter.” The M&M emails make it appear Miller was trying to help lead McCoy through the Anchorage permitting process.
Miller at one point messaged McCoy to ask if ADN wanted purchase orders to detail the costs of revisions to the electrical distribution system that proved to be needed during the building remodel.
“No PO needed,” McCoy responded,”Need brake (sic) down as we talked. Weekly invoice as we talked. Email to my email. Brake (sic) out a number for engineering along with the other groups we went over.”
No printing plant
Rogoff was in a rush to get the Midtown printing plant ready because she needed to move her printing operations out of the old Anchorage Daily News building on Northway Drive in the city’s Airport Heights area.
In order to make possible the $34 million purchase of the newspaper from McClatchy in March of 2014, Rogoff had agreed to sell the old ADN home to GCI for $14.5 million and a commitment to provide $500,000 in ADN advertising once she had control of the newspaper.
The building contained not only the ADN offices, but the ADN printing press.
GCI wanted the offices moved out, which was relatively easy. And the company offered Rogoff reasonable terms to house her printing press for the short team and keep it running at Northway until she could get a new press in operation.
That agreement finally fell apart in August of last year with Rogoff far behind in rent payments and electric bills.
Payments to GCI, M&M and others doing business with the ADN started to dry up shortly after company losses for fiscal 2016 passed the $5.2 million mark in October 2016, the lawsuit says.
The newspaper’s deep financial trouble went generally unreported even though there were rumors that could have been pursued and a community belief the newspaper remained a vital source of information for Alaskans.
Rogoff herself would later proclaim the ADN “vital to all Alaska” in a plea to a federal bankruptcy judge to approve a $1 million loan from the Fairbanks-based Binkley Company to keep the newspaper printing through August 2017.
That $1 million eventually became the purchase price for the business Rogoff had bought slightly more than three years before for $34 million. But by the time the ADN sold, it was basically devoid of assets.
The 125,000-square-foot monument to newspapers McClatchy had built in Alaska was gone. So, too, the newspaper’s printing press and much of its advertising punch. The news by then had largely moved online to where Rogoff had started before her dream of owning a newspaper cost her what most people would consider a fortune.