Rogoff faces creditors at bankruptcy hearing, claims $12.7M debt
The largest unsecured creditor was able to question Alaska Dispatch News owner Alice Rogoff under oath in federal bankruptcy court Sept. 7 only to discover for the first time that she disputes the $508,000 unpaid invoice for $1 million worth of work done wiring a press at her leased Arctic Boulevard warehouse.
Rogoff also explained why she now lists herself as the largest unsecured creditor of the newspaper she owns with a claim of $12.7 million.
Mark Miller, owner of M&M Wiring Service, said he has waited nearly a year to hear anything from her that would explain why she didn’t pay him for work that was part of Rogoff’s attempt to install new printing presses at the location and vacate the printing operating in a Northway Drive building owned by GCI.
During a special meeting of creditors in Anchorage Thursday afternoon, Miller was able to ask Rogoff, who appeared in court in person for the first time after phoning in for previous hearings, if she acknowledged M&M Wiring and contractors had done substantial work at the Arctic Boulevard warehouse.
“Yes, but less than we expected by a sizable measureable,” Rogoff responded.
“Did you talk to me about why?” he asked.
“No,” Rogoff admitted.
Miller was one of three people who volunteered to sit on the Unsecured Creditors’ Committee that met at the court. Mostly, attorneys for creditors quizzed Rogoff about her assets under the direction of the U.S. Trustee attorney Kathryn Perkins, who is a Justice Department official appointed by the court to guard stakeholder interests.
Anyone filing for bankruptcy must appear in court at the meeting with creditors, officially known as a 341 hearing. The purpose is to allow the trustee to verify the accuracy of bankruptcy filings that relate to finances. The end goal is to liquidate these assets for paying off bills owed to individuals and businesses.
Catalyst Paper owner Craig Graham of Richmond, British Columbia, and attorney John McKay of Anchorage were the other two on the committee. Neither Graham nor McKay asked questions.
Perkins asked a series of questions about her latest filings that now list her among the unsecured creditors, with a Sept. 6 filing increasing the amount she claims is owed to her from $8.2 million to $12.7 million. Rogoff did not include herself among the unsecured creditors of the ADN after she filed for bankruptcy Aug. 12. Northrim Bank is the largest secured creditor with a $10.2 million balance on a $13 million loan Rogoff took out in 2014 to purchase the ADN from McClatchy.
She first claimed herself as a creditor in an Aug. 28 filing and updated that in her Sept. 7 filing.
“That is from two promissory notes to funds I deposited in 2015 and 2016 to the Alaska Dispatch,” Rogoff said.
She said some of it was to make payroll and other day-to-day expenses of the newspaper.
ADN Financial Director Erin Austin elaborated to Perkins that when funds were low for paying bills, they would let Rogoff know.
“She would transfer money into the company account and we placed it on a balance sheet,” Austin said. “At the end of the year, we would convert it to a debtor’s note.”
It was also established that the presses Rogoff owns now present at the Arctic warehouse — an Urbanite Printing Press and a V30 Commercial Heat Set — are worth a combined $2.5 million. Rogoff said there is a market for the presses and she is hearing from people interested in buying them.
Fillings show assets of several vehicles and a $9,000 drone the company owns that could be sold for cash to pay creditors. The drone is used to take photos for the newspaper, Rogoff said.
Long trail of bills
In the latest filing after Rogoff increased the amount she claims is owed to her by the newspaper she owns, the total unsecured debt stands at about $15 million.
An 84-page document filed Sept. 7 listing companies and individuals she owes money to shows the bulk are Alaskans.
Smaller companies, sole proprietors, and multiple paper and printing companies are owed hundreds of thousands. She owes back rent to the owners of the Arctic Boulevard warehouse of more than $143,000. About 100 are freelance writers and staff owed $100 to $900.
She owes the Municipality of Anchorage $56,500 in back taxes and GCI for rent and utilities totally $1.4 million.
Nationally, Rogoff leaves a trail of debt for other content providers. The Washington Post is out for $11,700 and the Wall Street Journal is owed $10,277. She owes the New York Times for syndicated columns and Thomson Reuters for financial news. In the Midwest, she owes a Chicago paper company $6,307, a Wisconsin technology company $14,000, a Philadelphia newsprint concern $34,871, and Tennessee’s Birket Co., $161,000 for her Urbanite printing press.
The latest filing shows new debts were added in, including $25,000 to the Trustees of Columbia University that she told Perkins is paid through her Alaska Dispatch account.
Mark Miller is the owner of M&M Wiring Services, which specializes in electrical contracting for large and small projects. His company recently completed work on two projects at the Port of Anchorage for Anchorage Sand & Gravel.
In August 2016, he was hired to wire the Urbanite press Rogoff purchased from Indiana and shipped to Alaska for installation at the 5900 Arctic Blvd. warehouse.
“We wired the press and other equipment they moved from Northway (site of the ADN Goss printing press.),” he said.
Employees of J Birket Inc. of Lebanon, Tenn., traveled north to install the press, Miller said. M&M Wiring came in with subcontractor North Coast Electric, which completed about $19,000 for materials.
By December 2016, he and his contractors were dismissed without much of an explanation, he said. M&M held outstanding invoices from Rogoff, but said he paid his own subcontractors.
“I would be embarrassed if I couldn’t pay them,” he said.
But getting stiffed for $508,000 work meant not only he didn’t get paid for the job his company completed. He was also out the money to his subcontractors.
Given the cash shortfall, last winter he laid off two of his fulltime employees. He said he’s “adamant” he wasn’t going to get dragged into bankruptcy over the loss and worked extra hard.
“We poured our hearts and souls into getting this done and doing everything professional,” he said, referring to the work at the Arctic warehouse. “It wasn’t a handshake; it was documented and professional. No one does a million dollars worth of work without contracts. Then she failed and refused to communicate on every level.”
During the work, Miller reported to project managers hired by Rogoff. One was her “friend and dog sitter,” Ed McCoy; another was her attorney, Adam Cook, Miller said. A replacement project manager was the one who sent him a letter saying M&M’s work was being terminated.
“We had completed five months’ work, and worked literally until the last minute, until we got a termination letter telling us to turn in the final invoice and ‘we’ll get you paid,’” Miller said.
Three weeks later, Miller submitted his invoice. When months went by and he didn’t receive payment, he wrote to Rogoff.
He didn’t receive a single response.
“I sent her emails last March asking to meet up and discuss what the situation was in not paying the invoice. It was like a bomb went off. Her lawyer (Adam Cook) fired back and said, ‘If you email my client one more time, I’ll file a harassment suit.’” Miller said.
Miller believes the project manager McCoy, who reported directly to Rogoff by visiting her home each day after work, “threw us under the bus.”
“She was concerned about the schedule,” Miller said. “He (McCoy) would say, ‘two more weeks; it should be done in two weeks.’ She kept pressing him on it. Adam Cook, was another project manger and he’s also her lawyer. He approached Ed and asked what will it take to fix the project.”
Cost cutting and speeding up completion were the two reasons Miller assumes for curtailing his contract with Rogoff.
Dealings with Rogoff lead him to now see her as having “utter disregard.”
“It was the flippant response she had and why she does she do that? It appears, in my opinion, she thinks, ‘I’m Alice Rogoff. I don’t have to pay you.’ I’ve heard she calls Alaskans a bunch of hillbillies.”
Miller said he joined with two other contractors (Anchorage Sheet Metal and Precision Maintenance and Fabricating Inc.) to file the lien on the press at Northway Drive. M&M and Anchorage Sheet Metal have since released their lien, but M&M is counted as the largest unsecured creditor in Rogoff’s ADN bankruptcy proceedings. Now he stands behind Rogoff in her own line-up of owed bills.
At the heart of the bankruptcy filings is a lack of disclosure so far on what income Rogoff possesses that could be used to pay the bills. She has a separation agreement with her billionaire husband, David Rubenstein that provides $5 million per year, according to an Alaska Superior Court filing in another lawsuit brought against Rogoff by former Alaska Dispatch News partner Tony Hopfinger. Hopfinger is suing to collect $900,000 of the $1 million she agreed to pay him in a contract written on a cocktail napkin.
In court Sept. 7, Rogoff refused to answer questions about her personal finances regarding her marriage to Rubenstein. She is allowed that, according to Perkins, who warned creditors they could only quiz Rogoff on matters related to the debt as it applies to the ADN.
“She tries to keep her finances under wrap,” Miller said. “My feeling is that all these Alaskans she owes money to are pawns in a divorce settlement. She is using us for leverage for a bigger divorce settlement from her husband.”
GCI also allege Rogoff is hiding her finances behind corporations she formed in Alaska.
“ADN and AK Publishing are mere instruments of Alice Rogoff, the corporate forms of which continue to be used by Rogoff to defeat public convenience and justify wrong,” GCI attorneys wrote in their Aug. 10 Alaska Superior Court filing to evict the ADN from the Northway Drive building the telecom bought for $15 million as part of the deal that allowed her to purchase the paper.
GCI attorneys are arguing that, under Alaska law, Rogoff’s conduct pierces the corporate veils of ADN and AK Publishing. That makes her personally liable for both companies’ debts, obligations and judgments to GCI, they contend.
A sale hearing is scheduled for Sept. 11 to auction off the Alaska Dispatch to the highest bidder.
The Binkley Co. is loaning the ADN $1 million to pay off immediate debts to allow the newspaper to maintain operations in exchange for a $1 million purchase price. Any other bidders have until 5 p.m. on Friday to submit $1 million in cash if they want to bid for more on the company.
If no other bidder comes forward, the asset purchase agreement between the Binkley Co. and Rogoff could be approved. How the unsecured creditors such as M&M Wiring will receive any payment will remain unresolved. The U.S. Trustee has recommended converting the case to a Chapter 7 bankruptcy to allow the liquidation of all assets not purchased by the Binkley Co. in order to pay creditors.
Naomi Klouda can be reached at [email protected]