By: Mark Fitzgerald
For a weekly that rarely sold more than 4,500 copies — and is considerably below that circulation now — the Point Reyes Light in Marin County, Calif., over the years has earned more than its fair share of industry attention.
In 1979 under the ownership of Cathy and Dave Mitchell, the Light won the Pulitzer Prize for Public Service for its courageous reporting on the violent activities of the Synanon cult. The public feud between Dave Mitchell and new owner Robert Plotkin became the stuff of stories well beyond Marin. And in late May when the Light was sold again, it made headlines for being the first newspaper organized as a low-profit limited liability company, or L3C.
Now, literally days after the new Light owners have settled in, the peninsula known for its New Age-y vibe is getting a taste of the start of a nasty newspaper war.
The West Marin Citizen, the weekly almost exactly started three years ago to challenge the Plotkin-owned Light on its own turf, accuses the non-profit that now owns the Light, the Marin Media Institute (MMI) of attempting a “hostile takeover” of the Citizen in the bankruptcy case of its publisher, Joel Hack.
“While publicly declaring themselves champions of ‘social responsibility,’ the Marin Media Institute is operating behind the scenes using high-priced lawyers and exotic legal maneuvers, in an attempt to force the sale and liquidation of the West Marin Citizen,” Hack wrote on the front page of an “EXTRA” edition.
In a telephone interview, Hack says MMI principals continue to argue in the media that the market cannot sustain two newspapers because they want to get the advertising the Citizen is running.
“They want us out of the way so they can operate in a one-newspaper town,” Hack said. “We’re making it…I have no problem competing in a two-newspaper town because we have the dominant paper.”
Hack has filed for Chapter 13 bankruptcy protection, which he says has everything to do with some IRS tax problems — and nothing to do with the newspaper. He accuses the Light of trying to get his bankruptcy reclassified as a Chapter 7 or Chapter 11 case in order to wrest possession of the Citizen. The trustee assigned to the case has made a motion to reclassify the case, which will be heard at a July 19 court hearing.
In April, after the trustee’s proposal to reclassify the bankruptcy, an MMI lawyer informed the trustee in a letter that it had been negotiating for the Citizen, unaware that Hack had filed for bankruptcy.
For their part, the MMI principals are responding in a low-key manner that denies they did anything improper action and suggests they wish the controversy would just go away. MMI issued a short statement in the current issue, and is scheduled to run a somewhat longer story on the topic in the issue that hits the streets Thursday.
One thing both sides can agree upon is that MMI principals and Hack talked about MMI acquiring the Citizen. Who approached whom and who broke off negotiations and why are matters of deep disagreement, however. Each accuses the other of violating a non-disclosure agreement.
Hack approached the MMI parties, MMI said. “Throughout negotiations, Joel failed to disclose that he had filed personal bankruptcy; rather, he said he was only thinking of it,” the statement said. “His original claim, filed in February, omitted three major assets, including the Citizen and the Bodega Bay Navigator (a visitors guide). After Joel filed an amendment in March that revealed these assets, the bankruptcy trustee proposed converting filing from Chapter 13 to Chapter 7 or 11. The April letter from (MMI) attorney Doug Ferguson reproduced in the Citizen’s special issue informed
court of the timely negotiations. It did not mention or suggest a conversion,
much less demand one.
”When the court asked the Institute a few weeks ago if it wished to resubmit
its offer to purchase the Citizen, the Institute answered that it did not,” the statement continued. “Where’s the hostile takeover? The only way the Institute will again consider
buying the paper is if Joel wants it to.”
In an interview, MMI Co-Chairman Corey Goodman said the institute at all times followed the advice of their counsel.
“We never asked for the paper to be liquidated.” Goodman said. “When we found out that Joel was in bankruptcy and we found out the court had jurisdiction over those assets” there was a legal obligation to end pursuit of the paper and inform the courts, he added.
The Light, Goodman said, is not afraid of competition. “Whether this market is big enough to support two papers, I doubt,” he added. “But if it can support two newspapers, wonderful.”
Hack says readers are “shocked and abhorred” at MMI, and some have volunteered to demonstrate outside the courthouse at the July hearing. “Instead of negotiating with us, they decided to acquire us by other means,” Hack says of MMI. “That’s something they did, not something they say.”