OPINION: ROGOFF HAS BEEN RECKLESS, AT BEST
Earlier this week, the owner of the Alaska Dispatch News asked the court to allow her to borrow money to pay Premera Blue Cross some $262,557 in back due premiums for her 212 employees, whose medical bills are no longer being honored by Premera. That hearing is today.
Alice Rogoff also is behind in her workers’ compensation insurance and general liability insurance — tens of thousands of dollars behind.
To keep the newspaper’s doors open, she must pay these premiums immediately, she will tell the court through her attorneys. She needs a loan to do that.
On Wednesday, Rogoff added on another request for the court to consider: It’s now payday for her news carriers, who make about as little as anyone in the workforce, work awful hours, and who usually need the pay more than just about anyone.
Rogoff has no money to pay them, she is telling U.S. Bankruptcy Court. May she please also borrow $160,000 from the Binkley Company LLC to keep this workforce from walking out?
But even that will not be enough: Friday is another payday for employees, she said, and although her pleading to the court doesn’t indicate the amount due, she obviously owes hundreds of thousands.
That Rogoff took her newspaper all the way to the edge of the cliff before declaring bankruptcy is a sign of someone who is either reckless or delusional. Or both.
As she returns home to a palatial lakefront estate each night, one that is filled with art and fine furnishings, and as she flies all over the world to meet with Arctic leaders, and hosts Arctic conferences and Presidential dinners, all along Rogoff has been playing a game of chicken with the lives of her workforce.
Newspaper carriers work 365 days a year. They are not employees, but independent workers and the newspaper business has fought to keep them in that category to reduce company liabilities.
These one-man or one-woman operations, often delivering by vehicle, get up by about 3 am each day, meet a newspaper circulation worker at a distribution spot, get their bundles and their lists of subscribers, and hit the neighborhoods in the wee hours of the morning. It’s a thankless job that requires carriers to use their own vehicles, pay their own gas and maintenance, carry their own car insurance, and encounter all kinds of weather and other hazards of the north.
People who deliver newspapers are sometimes doing it as a second or third job. Some are trying to work their way back into the workforce, but cannot be hired at most other jobs because of something on their record, like a felony conviction. Others are retired or newly washed-ashore immigrants just trying to make ends meet.
Once upon a time, these carriers were the neighborhood kids, tossing papers, but the job now goes to a nocturnal workforce of low-income workers. The distances are too great and the hazards too real.
Sometimes they have very young children with them, asleep in the backseat. There is no minimum wage, and no health insurance policy for these independent workers. Without the pay, today, the circulation of the newspaper drops from about 22,000-25,000 a day to zilch.
That is how close the Dispatch is to complete collapse. Now a judge must decide if it can even last another day.
A committee on behalf of the creditors filed a motion fighting Rogoff’s proposal to pay Premera and her employees before she pays the people she has owed hundreds of thousands of dollars to for months.
Rogoff will have to convince the judge that by borrowing money from her potential buyer, the Binkley Company LLC, that the greater good of all has been served.
That’s a high hill to climb for Rogoff because she has, it can be argued, been operating negligently for months, if not years.
Rather than focusing on her clearly failing business, which she acknowledged to readers in a message she wrote earlier this year, she attended Arctic conferences and symposiums, such as being a speaker at the Fourth Annual Arctic Encounter Symposium in Seattle in April, and the Wilson Center Polar Initiative in March.
She has flown her planes around Alaska until crashing into the waters of Halibut Cove, but she continues to travel with the help of a private pilot. She has fresh flowers on the table and maintains a lifestyle most Alaskans would consider lavish. This is all at the expense of at least 200 creditors and now some 212 workers who might not get paid.
“Like news organizations everywhere, we’re searching for the best way to navigate our industry’s ever-evolving landscape. We intend to serve Alaskans for generations to come, and we are taking these steps to ensure we will be able to do so,” she wrote in January, when she announced the end of Saturday’s edition.
By then, she was already late paying several of the creditors, such as M&M Wiring, who are now hoping the courts will provide them with the same kind of relief Rogoff is proposing to give Premera, a multi-billion out-of-state company. The Dispatch owes M&M some $459,000-$500,000.
Meanwhile, several of the companies fighting Rogoff on this proposal are small local businesses, many of whom cannot afford health insurance on themselves.
Rogoff has argued to the court that the morale of her workforce is low because she has not paid their health insurance premiums:
“Employee morale has suffered significantly due to Premera not processing medical claims other than pharmacy benefits. This past due amount, $262,556.99, is included in the cash budget for which Debtor seeks approval in its motion for a DIP [Debtor in Possession] loan, and use of cash collateral, and is a major reason why the first week’s advance under the proposed DIP loan is $350,000, whereas subsequent weekly loans are $200,000. Going forward, Debtor seeks approval to pay post-petition monthly payments to Premera on a timely basis,” she wrote the court.
Getting your doctor bills paid is important, but there is a safety net in the system called Obamacare.
Likely there are other reasons for sagging employee morale — such as the uncertainty created by a business owner who has not been a good steward of her company and its finances. The uncertainty of not getting a paycheck at all is probably the greatest impact on morale, especially since jobs in Alaska are few and far between for newspaper professionals.
And nothing affects morale of a newsroom more than having to print fake news about fictional investors in the newspaper, or even worse, to report no news at all about the collapse of one’s own organization, which has been losing as much as $8 million a year since Rogoff bought it from McClatchy in 2014 for $34 million.
The deal she is trying to make today with the Binkley Company LLC is to sell them the paper for $1 million, all of which would go for current expenses that must be paid to even keep the doors open through the end of August.