Any chance to reorganize Alice Rogoff’s remaining Alaska Dispatch newspaper holdings after the chapter 11 bankruptcy filing was deemed at “0.00 percent” by her attorney at a Sept. 21 hearing, bad news for those left holding the bag on more than $2 million of debts.
Yet, at the hearing, Federal Bankruptcy Court Judge Gary Spraker gave the go-ahead to liquidate what assets do remain. He granted a request that the bankruptcy case be converted to a chapter 7, which allows selling all assets – whatever there may be – to pay creditors. The process will be overseen by an objective third-party official appointed by the court, Nacole Jipping, whose task is to get as much value as possible from what remains. The money is then distributed over those owed.
Rogoff sought chapter 11 protection at the end of financial difficulties operating the Alaska Dispatch on Aug. 12 after saying she had lost more than $4 million in the first six months of 2017. The newspaper and many of its assets were sold to the Binkley Co. for $1 million after a public auction brought forth no other bidders on Sept. 11.
“The sale transfer is now closed and Mr. Binkley is in the daily business of putting out a newspaper?” Spraker asked. Attorney Erik LeRoy, representing the Binkley Co., confirmed that is the case.
Creditors owed money – landlords at leased facilities, numerous paper companies and contractors – had waited to see what Binkley Co. chose not to purchase. Attorney for the U.S. Trustee monitoring the case on behalf of creditors and the public, Kathryn Perkins, said at the last hearing that she wanted to determine what assets “were left on the table” after the Binkleys made decisions on equipment and supplies they would keep.
That list came out the same day as the hearing, an inventory of ink pumps, paper reams, conveyors, tools, Conexes and a forklift. No printing press was on the list of items to be kept.
That means they will not purchase any of the three printing presses previously owned by the Anchorage Daily News and then the Alaska Dispatch. In previous hearings, it was determined the two presses housed at 5900 Arctic Blvd., warehouse could be worth $250,000 if sold.
A third press under daily use at the GCI building at 1001 Northway Dr., a Goss Urbanite, was also on the list of rejected assets but will continue to be used by the Binkley Co. until other arrangements are made, LeRoy said. Testimony had established that this press was going to cost so much to remove, more than $1 million, that it wouldn’t be worth much in parts to be sold. Nevertheless, it was on the list of remaining assets, and Rogoff has guaranteed to GCI that she will pay the cost of its removal.
“The speed with which this case has happened in this court case compels the court to agree it should be converted,” Spraker said at the hearing. “There is no doubt the creditors bear the brunt of this bankruptcy. The court agrees an independent examiner of any such rights that may lead to recovery should be fully examined.”
Rogoff attorney Cabot Christianson told the judge he didn’t object to converting the case. “There’s 0.00 percent chance that this debtor (Alice Rogoff) will be reorganized,” Christianson said, referring to any remaining assets that can be brought forth to help pay debts.
But a chapter 7 official, such as Jibbing, may be able to raise questions about financial resources Rogoff could use to apply down the debts, LeRoy said.
In another matter, Spraker also decided against a motion put forth by Arctic Partners attorney, Jason Kettrick. He had asked that the landlord at 5900 Arctic be given more latitude to negotiate over the removal of the presses located in that warehouse. But in filings Sept. 21, attorney Kathryn Perkins, representing the U.S. Trustee, objected to the request.
“Instead, Arctic should be required to comply with the ‘notice and a hearing’ requirements … and a chapter 7 trustee should be given the requisite notice period accorded” to evaluate whether the assets there could be used to pay some debts.
Arctic needs to show it is entitled to administrative expense priority, Perkins wrote.
Spraker acknowledged the debt owed to Arctic Partners (about $144,000), but asked that Arctic Partners follow the process set forth in liquidation of assets under chapter 7.
Others will have to wait as well. GCI, owed $1.4 million in back rent and utility bills, said, ““GCI’s claim against the Alaska Dispatch News, like all other unsecured claims against ADN, remains open. Along with all other creditors, we await the outcome of the Chapter 7 process.”
In 2014, Alice Rogoff purchased the Anchorage Daily News from national newspaper chain McClatchy Corp. for $34 million. As part of the deal, she sold the newspaper’s building in East Anchorage to Alaska telecommunications company GCI for $15 million. Rogoff is married to billionaire and Carlyle Group co-founder David Rubenstein, but has stated that any shared marital funds are off limit to the bankruptcy case.
Perkins, the trustee’s attorney, agreed that those owed money could not question Rogoff directly on her personal fortune. But questions in this area is not off limits to a chapter 7 official.
Naomi Klouda can be reached at Naomi.email@example.com.