After eight days of sometimes rambling and regularly wandering testimony over the course of two weeks, the $1 million lawsuit former Alaska Dispatch News editor Tony Hopfinger filed against old boss Alice Rogoff is set to be handed to an Anchorage jury today.
Superior Court Judge Andrew Guidi set closing arguments in the so-called “napkin case” for 8:30 a.m. The jury should get the case by afternoon.
What jurors decide could well hinge on what they think of the “in my mind” defense of the 67-year-old Rogoff, a one-time East Coast socialite who invested in Hopfinger’s Alaska Dispatch on a journey to achieve her dream of ownership of the Anchorage Daily News.
Funded by millions of dollars from estranged, billionaire husband David Rubenstein, she bought the News in May 2014 only to have it in deep financial trouble by early 2017 and in bankruptcy by August of that year.
Along the way she blew up what she summarized as a professional marriage to Hopfinger and now ex-wife Amanda Coyne, the co-founder of the Dispatch; helped get friend Bill Walker elected governor of Alaska; finally divorced Rubenstein; and left a trail of chaos in her wake.
She was sued for millions by the company that owned the building housing her old press, the company that owned the building she wanted to make into a new press plant, and the contractor preparing that building.
The bankruptcy dragged out for months and threatened to leave debtors, some of them small Alaska businesses, out $2 million. A laywer for a bankruptcy trustee threatened Rogoff with fraud charges and the loss of her now prize news site – Arctic Now – before Rubenstein stepped in to help settle issues with a promise to fund $1.5 million in repayment to Rogoff debtors.
Though she claimed $23 million in losses from loans to the Dispatch News limited liability company – one of her many Alaska LLCs – during the bankruptcy hearing, she agreed to drop those claims.
She has settled most of the lawsuits, but remains in a nasty battle with Mark Miller of M&M Wiring Services. Miller showed up in court one day last week to give Rogoff a courtroom entryway shout-out during a break.
“You’re doing great, Alice,” he said.
She did not respond, according to those who witnessed the encounter. Rogoff has largely avoided eye contact with Hopfinger and other former Alaska Dispatch and Daily News reporters and editors who have dropped in on the poorly attended trial.
Some have observed the largely empty gallery as a commentary on the state of the media in these times. There is agreement among old journalists that if the late and fabled publishers of the Anchorage Daily News, Kay Fanning, or the Anchorage Times, Bob Atwood, had gone on trial so shortly after the peak of their influence, the courtroom would likely have overflowed into the hallway and the reporters would have swarmed.
The newspaper itself has passed on to the Binkley Company, a business formed by a historic Alaska family from the community of Fairbanks in Central Alaska. They have changed the name back to the Daily News and stemmed the financial bleeding that put Rogoff out of business, but newspaper circulation is reported to be continuing its slow but steady downward slide as is the case almost everywhere in the country.
Fireworks
Testimony in the case ended Tuesday afternoon, and the lawyers were later snapping at each other after Jeffery Robinson, Hopfinger’s attorney, took a jab at Rogoff’s team of attorneys from Birch Horton Bittner & Cherot.
Rogoff repeatedly testified under oath that she couldn’t have been negotiating to pay Hopfinger $100,000 for 10 years for his remaining interest in Alaska Dispatch, a company about to be swallowed by the ADN, because “in my mind” the annual payments were intended to keep him rooted in Alaska for a decade.
“No reasonable person…should believe there was anything other than a contract to pay Mr. Hopfinger for his shares,” Robinson said after the jury had left for the day and attorneys were negotiating jury instructions with the judge.
There is no corroborating evidence to support any other idea, he said; no evidence to even hint at the incentive pay idea before Hopfinger filed suit and “they fabricated this argument.”
That brought Rogoff attorney David Gross to his feet to voice an angry objection to the accusation. His colleague Mara Michaletz complained to Guidi that “I’ve never been accused of unethical behavior before.”
Guidi told the lawyers to cool down. After a total of eight days of trial, he counseled everyone is tired and short-tempered. Michaletz thanked the judge, but Robinson wasn’t exactly letting go.
“I’m not intending to insult,” he said, “but that’s how it happened.”
Simple made complicated
On its face, the Hopfinger-Rogoff dispute would appear simple. Hopfinger and Rogoff discussed her buying his interest in Alaska Dispatch for $1 million, a sum almost as inflated as the $34 million she paid The McClatchy Company to buy the News.
Hopfinger hung onto a signed and dated napkin on which in March 2014 she promised the $1 million in 10 annual payments of $100,000. Rogoff was at the time under Northrim Bank restrictions not to make any deals over $50,000 per year without bank approval.
Hopfinger claims she told him the napkin would have to do until the bank, which had lent her $13 million to aid in the purchase of the News, waved the restriction and a formal contract could be drafted.
With the bank still watching over Rogoff’s shoulder, she made true on the agreement with the first payment of $100,000 written out to Hopfinger on a personal check in early 2015.
Hopfinger was then in on-and-off negotiations with Rogoff’s small army of Birch-Horton attorneys trying to hammer out the fine points of a proper, lawyerly approved contract with all the i’s dotted and t’s crossed.
He saved all his emails, which left quite the paper trail. It ended with an email from Rogoff to Hopfinger saying the bank restriction was lifted, and they could do the deal.
A subsequent argument over money and Rogoff’s discovery that Hopfinger had sold his house and really was leaving Alaska as he had earlier told her, ended their friendship shortly after that email was sent. Rogoff decided Hopfinger was disloyal, a claim that had led to the firing of at least one other top-level manager at the Dispatch News, and no more checks were written.
Hopfinger eventually sued, and that is when the case took a twist.
Attorneys for Rogoff argued that there had never been a deal because Hopfinger and Rogoff were negotiating different agreements.
Hopfinger, as is well documented, was negotiating the sale of his remaining interest in Alaska Dispatch for the 10 payments of $100,000, but Rogoff was negotiating a 10-year incentive plan to pay Hopfinger $100,000 per year on top of a salary of $190,000 a year to keep him in Alaska.
Rogoff claimed not to have seen the only email that could be found showing she’d been copied in on the more formal contract. Bill Bittner, one of the partners at Rogoff’s law firm, was accused of going rogue and negotiating the buy-out deal with Hopfinger without his client’s approval.
Hopfinger testified under oath that he and Rogoff had talked about the deal more than once. Rogoff denied any memory and testified under oath over and over again that “in my mind” the payments were always intended to assure Hopfinger would remain by her side.
Hopfinger’s fault
Rogoff holds Hopfinger responsible for the failure of the state’s largest newspaper under her ownership.
Her claim wasn’t much help to her attorneys, either, given that they built key parts of their case around the idea the Hopfinger napkin was no good because it wasn’t a formal document written in legalese. His testimony, Rogoff’s testimony, and that of most of her own expert witnesses only underlined the informality with which she did business at all her companies.
The judge was clearly left scratching his head.
In a written decision denying a request from Hopfinger’s attorneys that he prohibit the jury from considering the “incentive pay” argument, he Tuesday afternoon wrote that “the evidence supporting incentive compensation is extremely weak. There is a distinct paucity of objective evidence manifested during the formation of the contract to support that theory. Nonetheless, at this time the motion for directed verdict on this issue is denied.”
As he told the attorneys at the end of the hearing Tuesday, the incentive pay argument appears lame, but he’s not inclined to take it away from the jury’s consideration.
“I put a lot of faith in the jury to figure it out,” he said.