CONTRACT IS A CONTRACT IS A BAR NAPKIN
There was a time when your word was your bond in Alaska. Not long after that, you could scribble out an IOU on a bar napkin, and take that to the bank. Those were the days.
Those days might be over, but not for lack of trying by an idealistic journalist with ink in his veins and too much trust in his heart.
That would be the co-founder of the Alaska Dispatch, one Anton Hopfinger, who finds himself locked in an epic legal battle with the woman who took over his enterprise, one Alice Rogoff.
Yes, that Alice Rogoff, married to one of the richest men in the world. The woman who is advising the governor on the restructuring of the Permanent Fund into a Sovereign Wealth Fund, whatever that is. The woman who opened up a Native Arts gallery in downtown Anchorage, got hundreds of thousands of dollars in state grants, and then went out of business. The one who had the president over for dinner last year.
Hopfinger filed a complaint this week in Anchorage Superior Court, stating that Rogoff still owes him the better part of a $1 million for his 5 percent share of the Alaska Dispatch. The proof of the deal? In addition to witnesses present, there is Exhibit A, the bar napkin:
THE START UP
Hopfinger, who left the old Anchorage Daily News to start the online-only Alaska Dispatch with Amanda Coyne, details the history of his deteriorating relationship with Rogoff in the 18-page complaint, which lays out everything from the 2013 purchase of the Anchorage Daily News to a December argument between Hopfinger and Rogoff in the parking lot of the Alaska Railroad.
It’s all there, a textbook case of how Dad was right when he said “Get it in writing.”
Like so many partnerships, it started off rocking and rolling. In 2008, Hopfinger and Coyne were running one of the hottest, scrappiest journalistic properties in the nation, but they were vastly under-capitalized and overworked.
When Rogoff caught wind of the startup operation the next year, she offered to come aboard, essentially as an angel investor. Her timing was good; the deal was struck. Alice would own 90 percent of the operation, and Hopfinger and Coyne would split the remaining 10 percent.
Come 2012, Coyne was out – starting her own blog — and Hopfinger stayed on as editor, growing the property and hiring away all of the top talent from the Anchorage Daily News. He had a separate employment contract, which is Exhibit B in the complaint.
Then Rogoff had the idea of buying the Daily News and consolidating operations. After all, Rogoff discovered, there was value to having a printing press.
By 2013 Rogoff and Hopfinger were in discussion with McClatchy Co. But Hopfinger had his doubts: The dead-tree industry of newspapers was failing. Was it really a smart thing to do?
Rogoff was undeterred. She told Hopfinger that she might bring in other investors, naming Jon Rubini, the CEO and chairman of JL Properties, largest real estate firm in Alaska. That rubbed Hopfinger, still a journalist to his marrow, the wrong way, and the two began making plans for Hopfinger to start unwinding from the entire enterprise. But he’d stay on and help with the merger, the editing, the publishing – all the actual running of the newspaper.
According to the complaint, Hopfinger didn’t know that Rogoff had already formed up a new side company, AK Publishing LLC, which would be a holding company for her growing news empire. No one else knew either, evidently, and it did not come up in a lavish profile written about this maverick Washington socialite who had taken Alaska by storm.
As it became clear that Hopfinger would need to be bought out, he asked for $1.3 million, but accepted Rogoff’s $1 million offer, payable over 10 years, plus $300,000 in ownership of the new company.
By March, 2014, the deal was done. The Daily News covered it this way. From what ex-staffers tell us, it was a pretty rocky merger.
But after that, Hopfinger maintains, Rogoff started in with the delays and excuses. She couldn’t put things in writing just yet, because the bank needed to be kept out of the loop. Maybe Hopfinger began to sense that he was being gamed, so he pressed for an agreement, which came on a bar napkin: “I agree to pay Tony $100K at the end of each calendar year (beginning ’14) for 10 years.”
That’s a pretty loose deal for million-dollar promises and doesn’t come close to capturing the interest owed on what is essentially a 10-year loan. But Hopfinger, Rogoff, and her attorneys were all present when she turned over the napkin to him.
“Show this to the judge if I don’t ever pay you,” she said at the time, according to Hopfinger.
DEVIL IN THE DETAILS
Hopfinger stayed on, managing the merger of the Dispatch with the Daily News. They had to move offices, as the building had been sold to GCI. They needed new printing presses. There was the question of merging the two websites, staffs, and sales territories.
Rogoff made the first $100,000 payment to Hopfinger on Jan. 1, 2015, and that year she worked through her loan issues with Northrim Bank and communicated to Hopfinger that she was ready to sign off more formally on their contract, which she was not able to do earlier without spooking the bank.
But she never made any more payments, according to the complaint. In December, the two argued in the parking lot of the Alaska Railroad Building, and soon thereafter Hopfinger went on a pre-approved honeymoon. After he returned, his job at the new Dispatch enterprise was somehow terminated.
So now we come to the counts of the complaint: The promises made. The promises broken. The verbal agreements. The bar napkins. The employment severance.
It’s all over but the shouting.
The shouting, yes, but also the attorney fees and the lost opportunity, the stress, and the uncertainty. Rogoff, with her endless spigot of funds from her billionaire husband, David Rubenstein, could very well starve Tony Hopfinger for the rest of his life through the legal maneuvers that unbalance the scales of our court system.
Of course, Rogoff has another lawsuit going, which has her vs. McClatchy, a company that she claims pulled the wool over her eyes during her purchase of the Daily News, saying that McClatchy “failed to perform many of (its) obligations, which was a breach of the SPA (Stock Purchase Agreement) and a violation of the implied-in-law covenant of good faith and fair dealing, which is implied in all contracts.” (Update: Case was dismissed at request of plaintiff Rogoff on June 1).
Alice Rogoff has all-but disappeared from the public eye since hosting her presidential dinner last summer here in Anchorage, where she served caribou she’d shot. She did throw an engagement party for her PT Capital partner earlier this month, and 100 attended.
But if she seems to have a furrowed brow, it might be due to the troubles: a financially failing newspaper, a tanking readership, and her good will having all but dried up with her potential advertisers as the state sinks into recession. Becoming the “governor whisperer” to Bill Walker, whom she helped create, has not brought profit.
Her ace may be David Rubenstein — philanthropist,
millionaire billionaire husband, financier — who may come riding to her rescue with a satchel of cash and a gaggle of lawyers, because settling with Tony Hopfinger is going to be a lot cheaper than letting this case go to trial.