By day three of a nearly $1 million lawsuit pitting the former owner and publisher of the failed Alaska Dispatch News against the former editor, a sad tale of a friendship killed by a dispute over money had strayed deep into the theater of the absurd.
Since opening arguments on Wednesday, millionaire publisher Alice Rogoff – a child of privilege, the ex-wife of well-known investment mogul David Rubenstein, a friend to former Secretary of State John Kerry, the one-time Alaska host to visiting President Barack Obama, a confidant of 49th state Gov. Bill Walker and much, much more – has been on the stand explaining what goes on “in my mind.’’
What goes on there is sometimes hard to follow.
On Friday, Rogoff testified that she always planned to pay former editor Tony Hopfinger a promised $100,000 a year for 10 years though she was on the witness stand in an Anchorage Superior Court testifying in a lawsuit that involved her failure to pay Hopfinger the money.
“I had committed to pay him,” she said. “I never walked back from my commitment to pay him….I never thought there was a problem.”
After that statement, a rational person couldn’t help wondering what Rogoff and Hopfinger were doing in court taking up the time of a judge and jury of 14 listening to hours and hours of testimony about $900,000 yet to be paid.
At the heart of the 67-year-old Rogoff’s dispute with the 44-year-old writer and editor is the simple issue of the buyout of his interest in the news website Alaska Dispatch. But there are a lot of complicated emotional issues that radiate out from there.
Hopfinger has submitted as evidence a long list of emails showing that everyone involved with negotiations leading up to Rogoff hand writing and signing a note promising him 10 payments of $100,000 over 10 years – along with everyone later working to formalize the agreement – was talking about a buyout.
Rogoff, however, doesn’t see it that way. She is adamant that “in my mind’’ all discussions were part and parcel of a five-year employment contract Hopfinger inked before taking on the role of president of her newest acquisition – the Anchorage Daily News/ADN.com, later to be rebranded the Alaska Dispatch News/ADN.com.
Rogoff has described the napkin promise as a performance “incentive” added onto a $190,000 per year contract Hopfinger signed to run her newspaper. But her testimony has hinted at much more.
She has left little doubt as to her unhappiness that Hopfinger left Alaska only about a year and a half after she bought the Daily News. And she has expressed the opinion that if he had stayed in Alaska, the newspaper would still be her’s today instead of gone in bankruptcy.
The Dispatch was a three-pound northern pike that swallowed a 30-pound Chinook salmon only to choke to death.
The creation of Hopfinger and then-wife Amanda Coyne, the website grew from a kitchen-table idea into a news organization that had just enough juice to lead The McClatchy Company, one of the country’s largest newspaper chains, to conclude that it would be a good idea to sell the Daily News and abandon the Alaska market.
Rogoff played a huge role in that McClatchy decision.
After buying a 90 percent interest in the Dispatch for $75,000 in 2009, she poured in hundreds of thousands of dollars per year to employ reporters and editors to make the site grow. It gained enough size and respectability as a news operation that the Sacramento, CA-based McClatchy could not ignore it.
With profit-margins steadily falling in Anchorage and facing a competitor who looked to be in the market for the long haul, McClatchy surely felt lucky when Rogoff approached the chain in 2013 to express interest in buying its fading newspaper. When it looked like she might pay more than $30 million for a steadily shrinking onpaper operation and a stumbling online business, McClatchy could only have thought Rogoff a gift from the gods.
Eventually, a $34 million deal was struck to sell the ADN and Rogoff took over in April 2014. With the combined reporting power of the Dispatch and Daily News staffs, the newspaper briefly soared, but in less than three years – Rogoff having lost $23 million dollars – it died in a very public bankruptcy only to be scooped up by the Binkley Company from Fairbanks for $1 million.
By then, Hopfinger was long gone from Alaska. He cites family reasons. His mother was dying of cancer in the Chicago area, and his new wife found a good job at a university there.
But there are those who believe that after a nearly 6-year association with Rogoff, he might have been worried about where the ADN was headed. Rogoff’s business strategies were built on the idea of spending her way to profitability.
Every Alaska business with which she had been involved lost money. One of the founders of the nonprofit Alaska Native Arts Foundation (ANAF), she helped talk the state of Alaska into investing to the tune of $6 million to $8 million. ANAF was a well-intentioned effort to help market the art of rural Alaskans. The state lost everything it invested, and the ANAF eventually shut down.
Alaska Dispatch, meanwhile, lost money every year under Rogoff’s ownership. The losses only grew by orders of magnitude at the ADN. Anyone familiar with Rogoff’s business history might have seen it coming.
Hopfinger had enjoyed a ringside seat since the beginning. Even before the agreement to buy the ADN was finalized, he was negotiating with Rogoff to sell his 5 or 10 percent interest (fog still surrounds the question of how much he owned) in Dispatch. He offered it at $1.3 million. Rogoff countered with $1 million over time, and he accepted.
Payment plans worked best for Rogoff, who was subsisting on a $5 million per year payment from Rubenstein per a marital settlement agreement negotiated before she moved to Alaska. The Rogoff of Alaska spoke disparagingly of Rubenstein in private and glowingly of Hopfinger.
Until she didn’t.
For reasons unclear, Rogoff said in court Friday, Hopfinger – a man she viewed as her “professional life partner” – in 2015 went “from a person not motivated by money (to) this was all about money….Call me naïve.’’
Hopfinger had remarried. He was resettling in Chicago and trying to start a family. He’d told Rogoff he’d be glad to work from there on her newest project – the website “Arctic Today’’ – and would help with the Dispatch News as best he could remotely and on visits to Alaska, but added that he had no plans to return to the 49th state.
That isn’t exactly what Rogoff heard. In her mind that took on a somewhat different spin.
“I don’t think I ever got a definitive no,’’ she testified. “I don’t think that I ever gave up on that idea” of Hopfinger’s return.
Or at least she didn’t give up on the idea until he sold the home he owned in Anchorage’s Airport Heights subdivision.
“He sold his house,’’ Rogoff testified Thursday, “and he hadn’t told me.
“He was not as explicit with me as he could have been.’’
It was the beginning of the end. Hopfinger sensed it and pushed to formalize Rogoff’s April 2014 promise of a buyout sealed with the handwritten, signed and dated, cocktail-napkin.
Rogoff had already made one payment on that agreement, but decided Hopfinger didn’t deserve any more because he’d left the state. Hopfinger eventually sued to try to collect the remaining $900,000.
Between the two of them, they might now have spent close to $900,000 on attorney fees. It is rumored among Alaska lawyers that an early attempt to settle the case and save everyone money fizzled because Rogoff refused to deal.
In court, Rogoff has made it very clear she feels herself a woman wronged. She appears, in her mind, a victim of an over-bearing man who “left me in the lurch on the project that killed the newspaper.”
The napkin note, she claimed, was signed under duress. Hopfinger was “fist pounding and belligerent” in the Birch Horton Bittner & Cherot conference room on the day it was signed, she testified Thursday, although she later backed away from that claim a bit.
“I just remember a loud voice,” she told Hopfinger attorney Jeffrey Robinson when he pressed. “It sounded like he didn’t trust me. It was a very, very intense time.”
One of Rogoff’s many Birch Horton attorneys is said to have witnessed the signing. One of an attorney’s responsibilities is to ensure clients don’t sign anything under duress. Rogoff has, however, dragged the respected Anchorage law firm into the heart of her fight with Hopfinger.
On the stand Friday, Robinson confronted her with an email exchange between Hopfinger and Birch Horton partner Bill Bittner about three weeks after Rogoff wrote the napkin promise. Hopfinger wrote Bittner saying he wanted the agreement legally formalized.
“We will get a revised draft contract to you shortly for your review. Best regards, Bill,” Bittner wrote back.
“I wasn’t copied on this,” Rogoff said when asked about it.
When Robinson showed Rogoff the draft of the contract Bittner drew up, she said,”I was kind of surprised that he’d done this.”
After she reviewed the contract, which was on a large screen at the front of the courtroom, Robinson asked,”what are we looking at here.”
Rogoff’s answer was that it was something that “came out of a word processing machine.” She theorized that a Hopfinger draft agreement was reformatted and then circulated.
“It looks to me like it came from Tony,” she said. “I believe this was simply a reformatting of a document Tony sent to him.”
Asked if it was “Mr. Bittner’s fault,” everyone continued to be under the impression a buyout was being discussed, Rogoff said, “I wouldn’t say it was anyone’s fault.”
Then asked why none of this was resolved in a scheduled November 2015 meeting that was to involve Rogoff, Hopfinger, Bittner and an attorney for Hopfinger, Rogoff created a mystery.
The meeting was canceled because Rogoff didn’t show. Robinson asked her why not. Rogoff said at first that she was consumed with other business, but then added that she couldn’t talk about it.
“This is where I can’t say anymore because it was a conservation with (legal) counsel,” she said. “I assumed that meeting would be fine without me and what needed to be done would be done.”
Clearly, things did not work out that way.