Rubenstein wants agreement with ex-wife Rogoff kept out of court
Former Alaska Dispatch News owner Alice Rogoff’s attorney asked a federal bankruptcy court on Jan. 9 to hold off granting access to certain bank documents until attorneys for her billionaire ex-husband David Rubenstein can review them.
Federal Bankruptcy Judge Gary Spraker set a hearing for 9 a.m. Jan. 18 at the Historic Alaska Federal Court building to sort out motions on what should be kept out of public records in the prominent court case.
The latest legal arguments between the attorneys for the trustee Nicole Jipping, representing the public’s interest, and Rogoff stem from a deeper look into the former newspaper publisher’s finances known as a Rule 2004 examination. Rogoff’s attorney contends the source of her money should be barred from public view because it is confidential under the terms of her December 2017 divorce from Rubenstein.
The bankruptcy case, filed as a Chapter 11 reorganization on Aug. 12 and converted to a Chapter 7 liquidation after the sale of the company, is still in the discovery phase to find assets for repaying Rogoff’s $2.3 million in debts to dozens of local and national businesses and individuals.
An additional $16.6 million debt is tagged onto the case from Rogoff herself, claiming the failed Alaska Dispatch News owes her that much for personal funds she fed into the operation.
At the time of filing bankruptcy, and after selling the news operation for $1 million to the Binkley Co., on Sept. 11, 2017, she claimed the economy and dwindling revenues forced her to lose more than $4 million per year.
On Jan. 9, Rogoff’s attorney objected on her behalf to a motion asking for Northrim Bank records. The records may show collateral and other assets she listed in order to obtain a $13 million loan to help pay the $34 million price to purchase the Anchorage Daily News from McClatchy in May 2014.
She immediately sold the headquarters building on Northway Drive housing the newsroom and printing press to Anchorage telecom GCI in order to raise $14.5 million to help pay for the daily.
The bottom line of the objections is a concern the Northrim loan documents would expose confidential marital settlement dollar amounts agreed to between Rogoff and Rubenstein. The couple were married in 1983 but separated legally in 2005. They divorced this past December, agreeing to keep the terms of their settlement confidential.
Rubenstein’s wealth has been estimated at nearly $3 billion by Fortune.
“An additional basis for objection applies to the Rogoff/Rubenstein marital settlement agreement and ancillary documents and communications regarding it,” wrote James Lister of Birch Horton Bittner and Cherot, P.C. of Washington, D.C. “Rogoff’s ex-husband David Rubenstein has a contractual confidentiality right in the MSA (marital settlement agreement) that must be respected.”
Apparently Rubenstein has written to Rogoff’s attorneys through his own attorneys. He is “insisting that the contractual confidentiality provisions be enforced, and point(s) to remedies available to Rubenstein under the MSA if it is not.”
Lister argues that Rubenstein’s attorneys should be allowed to weigh in on Jipping’s request. A copy of Lister’s objection was served to Rubenstein’s attorney “for domestic relations” Sanford K. Ain at Ain & Bank in Washington, D.C., on Jan. 9. Ain & Bank, P.C. is a “collaborative partnership of some of the foremost attorneys in the Washington, D.C. metropolitan area, as well as the nation,” according to its website.
Some of Rogoff’s personal financial information is embedded in loan documents. The Rogoff/Rubenstein marital settlement agreement might be considered a “loan document backing the loan, although it is obviously not an asset of the Debtor ADN,” Lister wrote.
A marital settlement agreement is legally binding, he argues.
So far, bankruptcy Judges Frederick Corbit and Gary Spraker have signed off on two of four Rule 2004 motions from Jipping’s attorney, granting the request to look at various accounting and banking transactions incurred by the former Alaska Dispatch News and Wells Fargo. The judges did so by signing “ex parte motions,” meaning without a hearing of all the parties present.
Rogoff’s attorney said he expedited his request to the judge for denying this look into the Northrim loan contract out of concern that the judge will grant Jipping’s motion ex parte. He’s arguing it should be denied because where Rogoff acquired her money used to purchase the ADN “or to put money into (the) ADN, and what those personal financial assets are, is well beyond the scope of Rule 2004(b) pre-litigation and discovery.”
No matter Rogoff’s personal wealth, federal bankruptcy laws require the inquiries be kept to an examination of the finances related to the Alaska Dispatch News’ debts and assets.
Another point also has the two sides hung up.
AK Publishing was the limited liability corporation Rogoff set up to pay the bills for the Dispatch, according to her statements in the case.
Three Wells Fargo accounts were set up: one for payroll, one for accounts payable and one for general funds. Rogoff’s attorney is arguing the judge shouldn’t grant a blanket motion to look into those accounts because some may contain confidential non-Dispatch transactions.
Christy Tobin-Presser of Bush Kornfeld LLP in Seattle, representing the trustee, argues that AK Publishing was set up to handle the debts of the ADN and there is no evidence that any other confidential information should be part of it.
Tobin-Presser also set out stipulation agreements Jan. 12 on bank records that guarantee Jipping would keep confidential any findings that are not part of the 2004 exam, in response to Rogoff’s concerns.
According to the timeline set forth by Judge Spraker, when the Rule 2004 examination is complete, a court hearing will be scheduled that requires Rogoff to answer questions. Then the judge will rule on what to allow or disallow as assets and liabilities, including whether to allow Rogoff to continue to claim a $16.6 million debt to herself.
All those owed money by the former Alaska Dispatch News have until March 19 to file those claims in U.S. Federal Bankruptcy Court, Alaska Division.
Naomi Klouda can be reached at Naomi.email@example.com