Bristol Bay – Alaska’s highest profile salmon fishery – had a banner year, and yet everywhere in the global market Alaska salmon fisheries look to be in more and more trouble over the long-term.
A $2 to $3 dollar per pound commodity in the 1980s ($4 to $6 when corrected for inflation)Bristol Bay sockeye is today a $1 per pound commodity, and there is no sign the pricing is going to get much better. It could actually get worse.
Chilean farmed salmon production is again on the rise and production costs in South America are falling.
“AquaChile lowered costs by 13 percent in the first quarter of 2017, in line with other competitors,” Reuters reported from Santiago in mid-July. “The company’s shares rose 60 percent in 2016 and 13 percent in the first half of the year to 323 pesos and could rise another 25 percent, Guillermo Araya, analyst at local brokerage Renta 4 Chile said.
“‘According to technical indicators, this stock I see easily at 400 pesos,’ he said. ‘(AquaChile) isn’t the only one that looks good, the whole industry does.’”
“Lower costs” and an industry that “looks goods” are about the worse news possible for the Alaska fishing business given that University of Alaska Institute of Social and Economic Research economist Gunnar Knapp in a 2004 report observed that the “costs of farming, processing and distributing Chilean coho salmon to the Japanese wholesale market are about $1.63, and that future costs are likely to stay at about this level.”
The 170-page report is full of charts that show farmed salmon production costs and global salmon prices trending steadily downward for two decades. The news out of Chile would indicate the trend is continuing.
Why does it matter?
Chile is number two in global salmon production with an output of close to 400,000 metric tons. Norway is number one at about 1.2 million metric tons. Alaska, in a good year, can challenge Chile for production, but generally ranks number three overall.
And it lags way behind Chile in production of the premium product – fresh and frozen filets.
If Alaska Public Offices Commission filings are any indication, the Anchorage Municipal election in April is going to be, well, weird.
An independent expenditure “group” has filed with APOC under the name: “Everyone Poops and We Can Prove It!” It appears to be in opposition to a ballot initiative that is asking Anchorage voters whether men’s and women’s public bathrooms and locker rooms should be generally separate, as they have always been since the beginning of public bathrooms.
The Everyone Poops entity lists its abbreviation as: ??. For those whose computer screens don’t translate, that is a poop symbol and a police symbol.
Everyone Poops’ purpose is stated: “An entity independently formed in the spirit of humorist/ special counsel, Saul Molliver to investigate election fraud and defeat the ‘Regulating Access to Facilities such as Locker Rooms and Bathrooms’ Bathroom Bill.”
In other words, the group seeks to allow bathrooms to be open to any gender, something traditionalists oppose. The Protect Our Privacy bathroom bill will be on the April 3 ballot.
Paul M. Oliva is the only officer listed and he gives his title as ??. That appears to be “Poop Police,” if we’re reading it correctly.
In social media sites, Oliva lists himself as “Alaska’s resident smartass” and as the founder and lead developer at DataShark LLC.
Oliva appears to also be the creative genius behind a second registered campaign entity: Alaska Tea Party Watch / ???
The entity’s abbreviation is: ???. As in three cups of tea.
The purpose of the group is: “We pay protesters and internet trolls to annoy important people and make others laugh at them. Basically we elevate the dialogue, man.”
His title at Alaska Tea Party Watch is “Captain Paul and Troller in Chief.”
Oliva lists his address on “Potlach Circle” in Anchorage for both independent expenditure groups. (And yes, he spelled the name of the street wrong.)
Other than that, and the fact that this will be the first municipal election in Alaska to be conducted entirely by mail, the election season appears to be shaping up normally.
ROGOFF WANTS COURT TO OK INSURANCE PAYMENTS PRIOR TO FINAL DEAL
Alaska Dispatch News employees may be looking for individual health insurance policies in the Obamacare marketplace soon.
Either that or they should just plan to stay healthy during the newspaper’s bankruptcy proceedings, which may take a few weeks.
Rogoff, through the Alaska Dispatch News LLC, is asking U.S. Bankruptcy Court this Thursday to allow her to pay the past-due health insurance covering the newspaper’s 212 employees. The hearing is at 2 pm.
Premera Blue Cross is withholding payment on any claims until the Dispatch gets caught up, according to documents and at last count about $262,557 is owed by the newspaper to the insurance provider for both July and August. Right now, Premera is paying for pharmaceuticals only.
“Employee morale has suffered significantly due to Premera not processing medical claims other than pharmacy benefits,” Rogoff’s attorneys wrote to the court. The past due amount is part of a plan to sell the newspaper and declare Chapter 11 bankruptcy, a plan that Rogoff is seeking approval for from the court on Aug. 21.
But on Thursday she is simply asking for special dispensation to pay insurance payments with borrowed funds from the Binkley Company LLC.
Rogoff is also asking the court to approve her payment to Liberty Mutual, which carries her general liability insurance. The company is owed $10,227.75 for August. Without such payment, the ADN would need to close quickly.
The publisher also owes Berkshire Hathaway for July and August for workers compensation insurance; the July 26 payment of $26,733.68 is in arrears.
The court must decide if Rogoff can accept a bridge loan from the Binkley Company so it can pay these insurance bills, without which the newspaper will stop operating, or if the proceedings must wait for the full bankruptcy hearing later this month. The Binkley Company is attempting to buy the paper during the bankruptcy process.
Creditors are expected to crowd the courtroom on Thursday and plead their own case to the judge — that their workers, too, deserve to have their insurance paid, and that Rogoff’s workers should not take precedence over the needs of her other creditors.
They will also likely argue that she has enough personal wealth to pay the insurance, should she choose to sell some of her extensive art collection or liquidate her other properties. She still flies back and forth to Halibut Cove with the help of a private pilot, they’ll likely argue, so she has money somewhere.
The staff of the ADN losing its health insurance may not be everyone’s biggest concern right now — it appears that if the newspaper is to continue at all past the next payday, it will need to be smaller in size and operate with a far-leaner staff than today. That means layoffs are almost certain under the direction of the interim publisher, Jerry Grilly, who is leading the reorganization and stabilization of the newspaper.
The owner of the Alaska Dispatch News borrowed $13 million from Northrim Bank at the outset of her adventure in Alaska newspaper publishing in 2014, according to documents filed in bankruptcy court today.
The final sale price to the Binkley Company is $1 million, and that would just go to keeping the lights on at the newspaper. There is not expected to be much if anything left over for unsecured creditors.
The $13 million Alice Rogoff borrowed was a personal loan, and she contributed it as capital to AK Publishing LLC to buy the Anchorage Daily News from McClatchy. She also brought $6 million of her own money to the table in that fateful March, 2014 deal.
“From the time of the purchase, I was willing to operate ADN at an operating loss to both maintain robust journalism in Alaska, and as an investment in the future of the company. This included purchasing a new primary printing press, new print and online publishing systems, and development of new revenue streams,” Rogoff wrote to the court. “At the same time, ADN’s overall revenue from print declined, reflecting national trends in print readership and print advertising, and amplified by Alaska’s current economic recession.”
Her statement to the court shows the ADN had 2.6 million unique viewers of its online platforms in June, and she claims 4,000 digital-only subscribers — people who pay to access the paper in full online. Her newsprint circulation is not given, but may be as high as 25,000 daily. Sundays are 30,000.
She pressed her case that keeping the newspaper alive is essential for the entire state.
Without a sale, Rogoff wrote, “there is little choice but to cease ADN’s operations to the detriment of its subscribers, employees, advertisers, and the State of Alaska as a whole…”
“But the company requires major restructuring,” she wrote, and the paper is losing $125,000 per week. The Dispatch’s print circulation is losing between 7-10 percent each year, as most newspapers are doing in this era.
Rogoff said she could not find a suitable building to move her presses from what became GCI’s building on Northway Drive. After a search and “due diligence,” she entered into a long-term lease with Arctic Partners for the 59th and Arctic warehouse.
The retrofitting of the warehouse hit major snags and became untenable for Rogoff. The project was shelved in March and is now in litigation.
“Since the purchase of ADN, I have personally financed ADN’s operations, cash shortfalls, and capital expenditures. In addition to the Northrim Bank loan, I guaranteed the (i)Arctic Road lease and (ii) certain removal costs related to the GCI Lease. However, personal financing the future operations of ADN in addition to the current personal guarantees is no longer feasible.”
Rogoff said that the ADN employes 212 people: 58 in production, 52 in newsroom, 31 in advertising, 49 in circulation, 9 in the publisher’s office, 7 in finance, and 6 in information technology/web.
The health insurance policies for her employees are past due by $158,361.27, and payroll was made and covered through Aug. 6. Premera Blue Cross has agreed to not cancel the health insurance of employees until Sept. 15, giving the newspaper some time to make the payments.
But in the meantime, employee health claims will not be paid; only pharmaceutical bills will be covered.
Other insurance policies are also past due, as is workers compensation.
PIERCING THE CORPORATE VEIL
Rogoff wrote that “all payments I receive from a Marital Settlement Agreement with my husband, David Rubenstein, were directed and paid into my account at Northrim Bank.”
The bank received partial payment of its loan, which was extended on two occasions, the last being in March. The loan is due on September 30, 2017, in the amount of $10,165,000 plus interest of at least $81,459, and attorneys fees of $11,597.
In March, Rogoff made an additional security pledge to the bank, including security interests in the Dispatch, pledges from her marital settlement, and her personal investment accounts at Wells Fargo Bank.
In the filing, Rogoff describes how the newspaper overstayed the lease at GCI, ran into problems with the new leased space, and ended up with lawsuits and eviction orders.
“Finally, GCI is seeking to ‘pierce the corporate veil’ and hold me personally liable for the companies’ debts and obligations,” she wrote.
“Piercing the corporate veil” is a legal decision to treat the dealings of a corporation and its shareholders as the same, rather than treating the corporation as a separate legal entity. In these situations, the piercing of the veil allows creditors to go after personal assets.
Rogoff was stating that GCI is trying to make her personally liable for over $1 million.
The Binkley Company, LLC is attempting to buy the newspaper and has agreed to loan the newspaper up to $1 million. Rogoff said the first order of business with any installments from the Binkley Company would be to pay off the past due Premera Blue Cross health insurance premiums.
According to the settlement being proposed, very little would be left over are the sale of the paper to make whole the multitude of creditors; or as Rogoff puts it, there would be “little or no cash proceeds paid to the bankruptcy estate.”
MOM AND POPS AND MULTINATIONALS LINE UP FOR PAYMENT…
As the Alaska Dispatch News plunges deeper into Chapter 11 bankruptcy proceedings, owner Alice Rogoff was required to give the U.S. Bankruptcy Court a list of the top entities to which the Dispatch owes money.
Rogoff’s bankruptcy filing occurred Saturday night. Must Read Alaska acquired the list of creditors late today.
The list equals more than $2.08 million, and there are dozens upon dozens of other creditors whose amounts are not included. They are writers, suppliers, marketers, airlines, and lawyers.
Whether all the employees of the Dispatch actually have health insurance paid up is a legitimate question, as Premera Blue Cross is a major creditor. Even the Municipality of Anchorage is owed $56,516.
On the petition for bankruptcy filed by Rogoff, the now-former publisher checked the box to indicate that she believes as many as 199 entities are owed money.
The biggest amount listed is nearly $500,000 she evidently acknowledges is owed to M&M Wiring, which has taken her to court over the amount past due.
But by far the biggest debt at play is the more than $900,000 she owes to her former partner, Tony Hopfinger, based on a contract written on a bar napkin. She did not include that on the bankruptcy filing. It’s as though the debt just doesn’t exist.
Straight out of the movies, a contract for $1 million on a bar napkin, signed by Alice Rogoff.
Rogoff is in a legal dispute with Hopfinger in a case that goes to trial in March, with Rogoff claiming she does not owe him anything and the contract is unenforceable. She owes tens of thousands to the law firm that is defending her in the case — they made the Top 20 list.
Also not included on the list is Northrim Bank, where Rogoff is believed to have a financial relationship that required her to apparently put the entire newspaper up for collateral and purchase a $10 million life insurance policy on herself this spring, according to documents filed with the State Recorders Office. She also had to pledge her marital income stream (allowance) as a guarantee.
It may be that the Northrim debt is the responsibility of Rogoff personally, which could explain why Northrim is not listed in the Dispatch’s top 20. Rogoff herself has not filed for bankruptcy, nor is she thought likely to given her substantial family wealth.
Here, then, is a list of the top 20 Alaska Dispatch debts that are part of the bankruptcy filing, which means these companies are very likely to only get pennies on the dollar as the bankruptcy proceeds.
M&M Wiring: $491,219.55
GCI: $304,393.91
Premera Blue Cross: $262,556.99 (presumably this means health insurance of employees has not been paid).
J. Birket: $161,044.27 (press manufacturer)
Newscycle Solutions: $145,914.63
Arctic Partners: $143,891 (presumably for rent and other valuables at 59th and Arctic)
Frontline Construction: $68,901.31 (presumably for contract picked up after M&M Wiring was let go)
Among the 21 pages of other creditors who did not make the top 20, Rogoff lists debt to staff and freelance writers, such as Dermot Cole, Charles Wohlforth, Erik Hill, Nancy Lord, and other creative types, as well as companies large and small, in Alaska and as far away as New York.
360VINspin LLC, Ozark MO 65721
Adpay/Memoriam, Denver CO 80256-0101
AdPerfect Dynamic Advertising Inc., New Westminister BC V3L 3Cl
Advanced Vision Technology Inc., Alpharetta GA 30005
Air Land Transport Inc., Anchorage AK 99515
Alaska Airlines
Alaska On Point Service, Anchorage AK 99504
Alaska Waste, Anchorage AK 99519-6097
Alliance for Audited Media,Carol Stream IL 60197-5998
Allison Harvey, Palmer AK 99645 – Alaska Center for the Environment
American Fast Freight, Pasadena CA 91189-1833
Anchorage Convention Centers
Anchorage Printing Inc., Anchorage, AK 99503-3699
Arctic Office Mach & Furn Co., Anchorage AK 99510
Arctic Partners LLC, Tacoma WA 98422
Arrow Marketing Group, Cary, NC 27511
Ashley Adams, Anchorage, AK 99501
Bangerter Creative, Eagle River AK 99577
Berkshire Hathaway Homestate Co.
Bethany Goodrich, Sitka AK 99835
Birch Horton Bittner & Cherat, Anchorage, AK 99501
Bjorn D. Olson, Homer AK 99603
Boostability Corp., Lehi UT 84043
Boot Country, Anchorage AK 99518
Carlile Transportation Systems Inc., Seattle WA 98124-8448
Catalyst Paper Corp, Chicago, IL 60674
COW LLC, Vernon Hills, IL 60061
Centro Inc., Palintine IL 60055-0762
CENVEO,Pasadena CA 91110-1187
Charles Wohlforth, Anchorage AK 99517
Chartbeat Inc. New York NY 19993
ChicoCallCenter, Chico, CA 95927-8684
Christine Cunningham, Kenai, AK 99611
Chugach Electric, Anchorage AK 99519
Cinthia Ritchie, Anchorage AK 99517
Circulation Technicians, Gilbert AZ
Civil Co., Portland, OR
Clark Bryan Fair, Homer, AK
Continental Bag Professional Image, Mexico, MO
Continuous Printing of AK, Anchorage
Cornerstone Credit Services, Anchorage
Coul Productions LLC, Yorba Linda, CA
Creators Syndicate Inc.
John McKay, Anchorage, AK
David Allan James, Fairbanks, AK
Dermot Cole, Fairbanks, AK
Dexter Jackson, Anchorage, AK
Digital Direct Inc., Marysville, CA
Done Rite Cleaning, Anchorage, AK
Dow Jones & Co Inc, NY
Wall St Jrnl or Barrons
Doyle E. Woody, Anchorage, AK
Eagle Web Press, Salem, OR
Edgil, Danvers, MA
Ediwise, Mississaugua ON L5L 3R6
Emily Rohrabaugh, Anchorage, AK 95517
Enjoy the City North Inc., Binghamton NY 13095
Equifax CreditAtlanta GA 30348-5835
Eric E. Sain, Eagle River, AK 99577
Erica Rogers, Anchorage AK 99508
Erik Hill, Anchorage, AK 99517
Erin Austin, Anchorage, AK 99508
Erin K. Kirkland, Anchorage AK 99504
Erin McKittrick, Seldovia, AK 99663
Evelyn Elliot-Perez, Anchorage AK 99501
Events Air Cargo, Fairbanks AK 99706
Express Delivery Service Inc., Anchorage AK 99503-6604
Federal Express Corporation, Palatine IL 60094-4515
Firefly Marketing Communications, Kansas City MO 64184-3771
Fleet One, Nashville TN 37241-5000
Flint Group, Chicago, IL 60674
Frontline Construction LLC, Anchorage AK 99502
Gary Curtis Kanakis, Soldotna, AK 99669
GCI, Anchorage AK 99503
Geoffrey Z. Kirsch, Juneau AK 99807
Getty Images (US) Inc., St. Louis MO 63195-3604
Green Connection, Anchorage AK 99501
Heather V. Lende, Haines, AK 99827 – writer
Innovative Systems Design, Ponte Claire, QC H9R 1A6 Canada
J Birket Inc., Lebanon, TN 37087
Jason Thane Curry, Anchorage, AK 99504
Jerod C. Gunther, Anchorage, AK 99508
John Hancock Life Insurance, Los Angeles CA 90189-4764
John Schandelmeier, Gakona AK 99586
Joseph Robertia, Kasilof, AK 99610
Journal Graphics Inc., Portland OR 97210
Kayla Anderson, Anchorage AK 99502
Kelsey Lindsey, Anchorage AK 99503
Kenneth Thistle, Anchorage AK 99503
Kids Across Parents Down LLC, Matteson IL 60443
King Features Syndicate, Prescott, AZ 86304-9007
Legacy.com Inc.,Evanston IL 60201
Legal Notice Org, Rockville MD 20850
Lewis & Lewis Computer Store, Anchorage, AK 99503
LexisNexis, Los Angeles CA 90189-4166
Liberty Mutual Insurance Company, Boston MA 02116
Lincoln National Life Insurance Co., Carol Stream IL 60132-0821
Lisa K. Demer, Bethel, AK 99559 – writer
Liveintent Inc., New York NY 10007
M&M Wiring Service Inc.,Anchorage, AK 99516
Mail Finance, Dallas TX 75312-3682
Mary I. Young, Wasilla AK 99623-4964
Mather Economics LLC, Atlanta GA 30350
Meghan Mackey, Eagle River, AK 99577
Meyer Plastic LLC, Yakima, WA
Michael Engelhard, Fairbanks, AK
Michele L. Bennett, Chugiak, AK
Millwood Transit, Anchorage, AK
Miscellaneous Advertising Refunds
Miscellaneous Subscriber Refunds
Monster Worldwide Inc., Los Angeles, CA
Municipality of Anchorage
NACM Business Credit Services, Seattle, WA
Nancy J. Lord, Homer, AK – writer
NELA USA, River Falls, WI
New Neighbor Marketing, NYC
New York State Ins Fund, Albany, NY
New York Times Syndicated Sales, Pittsburg, PA
News Media Alliance, Arlington, VA
Newscycle Solutions Inc., Bloomington, MN
Newspaper in Education Inst, Cheverly, MD
Newspaper Subscription Service, Houston, TX
North Pacific Paper Corp, Federal Way, WA
Olive Software Inc., Auror, CO
Online Publications, Troy, MI
Opti Staffing Group, Anchorage
Paul A. Veilleux, Anchorage, AK 99504
Peninsula Airways Inc., Anchorage, AK 99502
PIP Printing, Anchorage AK 99501
Ponderay Newsprint Co., Philadelphia, PA 19178-1933
Premera Blue Cross, Seattle, WA 98111
Quad Graphics Marketing LLC, Sussex WI 53089
Quality Business Systems Inc., San Francisco CA 94139-8160
Rapid Action Mailing Service, Anchorage AK 99502
Rare Group Enterprise, Ontario, CA 91761
Ravn Alaska, Anchorage AK 99520
Red Wing Shoe Store, Anchorage Ak 99503
Reed Brennan Media Association, Orlando FL 32803
Rita Gelino-Beguette, Wasilla AK 99654-0269
Roger P. Weinfurter, Anchorage, AK
Rose Mason, Anchorage AK 99508
Serena Joseph, Anchorage AK 99515
Sizmek Technologies Inc., Austin TX 78701
Social News Desk Inc., Orlando FL 32891-9440
Software Business Systems Inc., Edina MN 55439-2313
Southern Lithoplate Inc, Atlanta, GA 31374-1887
Span Alaska Transportation Inc., Pasadena CA 91189-1714
Steve Meyer, Kenai AK 99611
Steve Vasquez, Anchorage AK 99507-2951
Steven H Kahn, Port Alsworth, AK 99653
Suburban Propane, Fresno, CA 93776
Suzanna Caldwell, Anchorage AK 99503
Syncronex LLC, Issaquah WA 98027
Tamara Dodds, Big Lake AK 99652
Thomas Head & Greisen, Anchorage, AK 99503
Thomson Reuters (Markets) LLC, Boston MA 02241
Thunder Industries, San Francisco CA 94108
Tribune Content Agency LLC, Chicago IL 60693
Tribune Media Services LLC, Boston MA 02241-5106
Trustees of Columbia U., New York, New York NY 10027
TSI North America LLC, Bellevue WA 98006
Tundra & Associates Inc., Wasilla AK 99687
United Feature Syndicate
Commerce Bank, Kansas City MO 64184-3771
Universal U-Click, Kansas City MO 64184-3345
Valley Transport & Storage, Palmer AK 99645
Washington Post Writers Group, Baltimore MD 21275-5442
WGA Independent Contractors, Camp Hill PA 17001-0008
William E. Sherwonit, Anchorage, AK 99517
WP Company LLC (Washington Post), Washington DC 20071
In Haines, the politics is unusually contentious this summer.
And that’s saying a lot for a city that has been through at least 14 city managers in 14 years, four school superintendents in four years, and which has a revolving door on its assembly. This year, the assistant harbormaster and the tourism director quit, and so did two assembly members — Margaret Friedenauer and Mike Case — following the controversial appointment of Debra Schnabel as the latest in the parade of borough managers.
Tuesday, voters will decide if three of the six Assembly members should be recalled: Tresham Gregg, Heather Lende and Tom Morphet.
Two of them are accused of exerting undue pressure on the police department.
Morphet, who until recently owned the local newspaper, the Chilkat Valley News, ran for assembly and won a seat, while retaining his role as a member of the media.
Lende, an author who also writes obituaries for the Chilkat Valley News, also won a seat.
Those two picked a fight with the police chief when he didn’t provide the newspaper with a police blotter.
The chief said it was very time consuming to write the blotter each week and in his judgment it was not a good use of his staff’s limited resources. But Lende and Morphet pressured him — and some in the community felt it was wrong to do so, since the two had a financial interest in the paper where the blotter is printed.
Morphet is also accused of making public accusations against specific employees of the police department, a violation of their employee rights.
The third allegation has to do with a series of emails between assembly members, where they appeared to be making a secret pact on how they would vote in an upcoming meeting. That could be a violation of the spirit of the Alaska Open Meetings statutes.
A public employees union has also weighed in on Facebook, specifically on the recall of Tom Morphet, saying he showed a disregard for the privacy rights of two police officers about whom he made unfounded accusations during an open meeting.
Morphet violated the borough’s collective bargaining agreement because the complaints constituted personnel matters, according to Tom Brice, business representative of Local 71, which has a political action committee that has gotten involved. The police officers had the right to an established complaint process, which starts with their supervisor, the police chief, before proceeding to the city manager, mayor and assembly.
Some have objected to the union’s political action committee getting involved, but Brice said that his group has a right to free speech just like anyone else.
“The purpose of this campaign is to inform and continue to bring to light facts about an inappropriate action by an elected official who used their position of power to violate borough code, contract, and due process of Haines Borough Employees,” the according to the union PAC’s Facebook post. “We are not engaging in the wider recall effort regarding Tresham Gregg and Heather Lende because they did not violate the contract between Local 71 and the Haines Borough.”
Morphet maintains he did nothing wrong, although he has also apologized for airing the personnel matters in public. The voting public will decide on Tuesday whether he, Lende and Gregg should be removed.
The news of the Alaska Dispatch News filing for bankruptcy while being sold to a group of longtime Alaskans was well-received by Must Read Alaska readers on Sunday morning. Several sent personal notes saying they plan to subscribe to the newspaper once again.
But the deal is not quite done. Alice Rogoff still owns the paper, although she has turned over management entirely to the group formed by the Binkley family and Jason Evans, according to those close to the businesses.
There are several moving parts to a process that will depend on good faith, skilled lawyering, and some amount of luck. It appears the new owners have that, plus longtime relationships in Alaska that will help them. What is unknown is whether the ever-litigious Rogoff will follow through or continue changing directions.
The Binkley-Evans group has been in discussion with Rogoff for several weeks, but they were not the only ones. Morris Communications was also looking at a possible purchase of the Dispatch. Press experts were flown in to examine the mess that Rogoff had, with two of her presses located in an inadequate building on 59th and Arctic, and a old-but-functioning press taking up room in a building now owned by GCI.
The Morris experts said the mess was too great to untangle without massive investment. It would cost at least $1.5 million to move the press from the GCI building, and the other presses were not ready to roll. Morris backed out. A short time later, the Morris’ sold almost all of their newspapers, including three in Alaska.
But the Binkleys soldiered on, with Jason Evans as a partner, in pressing Rogoff to sell the quickly failing newspaper.
Ryan Binkley and Jason Evans
ART OF THE DEAL
The Binkley-Evans partnership brings together two families with roots that go deep in Alaska. Evans is Inupiaq, born and raised in Nome. The Binkleys are Fairbanks blue blood.
In 2011, Jason Evans and his wife Kiana Peacock purchased the Arctic Sounder, The Dutch Harbor Fisherman and The Bristol Bay Times, which was combined with the Fisherman. The couple purchased the newspapers from Alaska Newspapers Inc, which was owned, operated and eventually liquidated by the Calista Corporation.
The five-generation Binkley family has been running riverboats in Alaska for five generations — over 100 years. In 1898, Charles M. Binkley hiked over the Chilkoot Pass with other stampeders, not in search of gold, but to build and operate boats on the Yukon and other Interior rivers. He became a respected pilot and boat builder in the North. His son, Captain Jim Binkley, Sr., followed in his father’s footsteps and piloted freight vessels on the Yukon and Tanana Rivers in the 1940s. The grandchildren and great grandchildren run the operations today, including the Riverboat Discovery, a 900-passenger tour vessel.
John Binkley, in his early 60s, wanted to buy the Fairbanks News-Miner when it came up for sale in 2015. But Media News Group, the Denver company that owned the paper, sold it to a foundation established by the former owners of the News-Miner.
In the purchase of the Alaska Dispatch News, it’s Ryan Binkley and his siblings, Wade Binkley, James Binkley, and Kai Binkley Sims, and the Alaska Media LLC who make up the new proposed owners.
The group has evidently agreed to the purchase of just the assets of the Dispatch, and they are today filing more documents relating to that purchase with bankruptcy court.
A judge must agree to the conditions.
In consideration, the Binkley family is loaning the company $1 million to keep the company operating until the bankruptcy reorganization can work its way to completion — which could be done within 30-45 days, if the courts agree to expedite it.
The deal has three major elements, and while Must Read Alaska doesn’t pretend to fully understand the technical nuances of bankruptcy law, those components seem to be the asset purchase agreement, a “debtor in possession” filing, and a Section 363.
The asset purchase agreement is what Rogoff is believed to have signed with the Binkley-Evans group.
Debtor in possession means Rogoff still owns the company, even though she filed for Chapter 11 bankruptcy protection. In this case, she appears to have given over control of all operations to Binkley-Evans, although the debts she owes are hers alone. A judge will have to approve that arrangement, and a court date is likely this week. A debtor in possession filing would be required to complete that temporary arrangement.
Section 363 of the U.S. Bankruptcy Code happens when a business is a distressed asset and has inadequate capital to continue operations. The potential purchaser, in this case the Binkley-Evans group, are willing to provide short-term financing to keep the business alive. The purchaser says it will pay for the assets if they come free and clear of any liens and debts, and this is a method that is part of a quick transaction that keeps the business from going under.
In the case of the Dispatch, the sale agreement can’t be concluded until the bankruptcy process is completed, but the Section 363 is a “stalking horse” position that gives the Binkley-Evans group an advantage for when the business comes out of bankrutpcy and is essentially put up for auction.
At that point, other entities can also bid on it, so it’s no sure deal that the Binkley-Evans ownership will proceed. They are simply in the best position to buy the newspaper now. As part of the DIP filing, the Binkleys have priority for getting their money back.
At this point, all major decisions will need to be approved by the court. Rogoff will next be required to file a complete list of her creditors, and indicate to the court which are secured creditors and which are unsecured.
Where that leaves her other creditors is uncertain. Some of them may get stiffed in Rogoff’s reorganization:
Tony Hopfinger, her former business partner who left in disgust or was fired by Rogoff (they have different sides to that story), has a contract written on a bar napkin: She owes him $900,000.
Northrim Bank has loaned her subtantial amounts of money and, among the pre-existing creditors, appears to be in first position to collect. Numerous contractors, landlords and others are owed what appears to be millions of dollars.
In the meantime, the talk in Must Read Alaska’s circles is that finally, for the first time in a quarter century, Anchorage may get a daily newspaper that doesn’t slant hard to the left.
Alaska Dispatch News has filed for Chapter 11, the last step before a company goes into bankruptcy. The filing allows the company to reorganize, but apparently it’s changing hands as a part of the deal.
The Dispatch is proceeding under new potential owners led by Ryan Binkley and Jason Evans, from longtime Alaska families. They will be co-publishers until a permanent publisher can be found, the new publishing group said Saturday night. It unclear if the paper has been actually sold, but it’s evident a sale is in the works.
Chapter 11 gives a company protection from creditors for a limited amount of time to allow it to restructure.
Ryan Binkley, Wade Binkley, James Binkley, and Kai Binkley Sims, and the Alaska Media LLC comprise the consortium that would be the new owners, should the court allow the deal to proceed.
Former Anchorage Daily News publisher Jerry Grilly, who retired as president and CEO of the Denver Post in 2012, is consulting with the group. He has been spotted in Anchorage over the past few days.
Dispatch owner Alice Rogoff said in a statement through what is now her former newspaper, “We’ve worked hard to help illuminate the issues of our day and provide a platform for points of view from across Alaska. Yet like newspapers everywhere, the struggle to make ends meet financially eventually caught up with us. I simply ran out of my ability to subsidize this great news product. Financial realities can’t be wished away.”
In addition to the Chapter 11 protections, the company says it plans to ask the bankruptcy court to allow it to borrow up to $1 million from the potential buyers, a group of Alaskans that include the Binkleys and Evans. The new buyers have been trying to close a deal with Rogoff for some time.
Last week, Rogoff told her staff in an email that she was in active discussion with “investors.”
On Friday, after news hit that her newspaper was being evicted from the GCI building on Northway Drive, she described it this way: “GCI is aware that we are in discussions with potential new owners and investors.”
She also told the Alaska Journal of Commerce last week, “Until the discussions are concluded, we are unable to provide any details. Please know that business disputes arise from many causes and are never one-sided. We hope that this matter will be resolved shortly to the benefit of all parties.”
The announcement of the purchase of the Anchorage Daily News by the Alaska Dispatch in 2014.
Today the landlord for the Alaska Dispatch News press operations on Northway Drive finally had enough of Alice Rogoff.
After trying to get the publisher of the Alaska Dispatch News to pay her full rent due for the better part of two years, GCI has asked the courts to help evict her presses from the premises that the telecommunications company bought from her in April of 2014.
The eviction notice, asking the court for its help removing the newspaper, was filed this morning in State Superior Court. The court has granted a hearing date for Aug. 21.
The history of the relationship between Alaska Dispatch News and GCI is laid out in the complaint, summarized here:
On April 7, 2014, the Dispatch, owned and operated by Rogoff, and GCI entered into a sale agreement, where GCI purchased the property, which allowed Rogoff to purchase the newspaper from McClatchy for $34 million.
The payment also included a purchase by GCI of $500,000 in advertising in the Dispatch.
During the sale and after it was completed, GCI maintains it made it clear it needed the entire building, and that the newspaper would need to vacate as quickly as possible.
But realizing how difficult it was to move a press quickly, GCI signed a short-term lease agreement with Rogoff so she could use 89,000 square feet of the building. The arrangement was for nine months for the office portion of the newspaper and 18 months for the warehouse-press portion, which expired in November, 2015.
To impress upon Rogoff the need for her to remove the Dispatch equipment and offices from the premises, GCI placed a holdover rent premium of 250 percent if she didn’t move at the end of the short-term lease.
The total damages that GCI has laid out in its lawsuit against Rogoff and the Dispatch is $1.39 million, but that increases daily with the unpaid electric bills and doesn’t include the cost of the six warehouses that GCI must rent because it cannot use its own building.
“The whole spirit of the negotiations has been the desire of ADN (the Dispatch) to move, and our desire to expedite that process, so we could use the warehouse, pull together the six warehouse facilities that we are renting into one, and use it as an operations and logistics hub for our company,” said Heather Handyside, spokesperson for GCI.
The fact that the Dispatch has not moved, and is now operating its presses in building where it has not had a lease since December, has been costly to GCI, which has had to rent the six warehouses, Handyside said.
GCI is also alleging that the Dispatch said it would not or could not pay a series of unrelated invoices totaling $205,558 for work GCI performed on ADN’s new offices on 31st and C Streets, because of a cash flow shortage.
GCI says that in lieu of payment, it agreed to take advertising credits.
Various extensions of the Northway Drive lease were worked out between the two organizations, as described in the eviction notice, and in November, 2016, Rogoff said she was making progress in removing the printing presses from the premises and would vacate Northway Drive by Dec. 15, 2016.
Rogoff had leased space in a warehouse at 59th and Arctic.
That move didn’t happen, as the building she had leased was inadequate for press operations and is now part of a lawsuit, because Rogoff has evidently not paid her contractors for the work performed there.
Meanwhile, at the Northway building, the Dispatch continued to refuse to pay the holdover rent premium, again saying it didn’t have the money.
GCI is also citing the problems the Dispatch has had paying other contractors, such as Anchorage Sheet Metal and M&M Wiring, which both filed liens against GCI’s Northway property due to bills not paid by the Dispatch. The M&M Wiring lien was released in March, 2017, while the Anchorage Sheet Metal lien, for $4,775, remains on the property.
M&M Wiring now has a lien against the building where the Dispatch was attempting to move, at 59th and Arctic, for work performed there.
The saga continued in 2017, with GCI attempting to get ADN to pay its bills and vacate the premises. Now, GCI says the Dispatch hasn’t even paid the base rent for July for August, 2017, and hasn’t paid GCI for its portion of the utility bill since February.
The electric bills for the Dispatch have been increasing from $29,000 in February to $46,000 in July, according to the eviction complaint, and GCI has paid Municipal Light and Power for the newspaper’s portion of the electricity. It’s costing GCI about $1,500 in Dispatch utilities per day, according to the court filings.
GCI estimates that it will cost the Dispatch about $1.5 million to remove the presses from the building and restore the area to a usable space for the owner.
BREAKDOWN IN NEGOTIATIONS
According to the court filing, GCI has presented alternatives to Rogoff to continue operations and prevent eviction, but none were acceptable to Rogoff.
GCI says that, at the time of filing, Rogoff owes $1,390,180 in base rent, additional rent, overdue fees, and interest. Plus utilities.
The GCI complaint (lawsuit) includes a claim against Rogoff, personally, seeking to “pierce the corporate veil” of her several layers of limited liability companies and thus hold her personally liable for the debts and related damages. Alaska law allows this in cases where it can be shown that a person is abusing the corporate veil in order to commit wrongful acts.
Should GCI be successful in holding Rogoff personally liable, her considerable family wealth and her monthly allowances could be brought into play.
