Friday, November 15, 2013

Inky Ownership Fight Tarnishing Brand

By Ralph Cipriano
for Bigtrial.net

For The Philadelphia Inquirer, it's all coming apart in Courtroom 630.

The combatants don't seem to have any self-awareness about how they're hurting themselves or tarnishing the  brand they're fighting over.

So far this week, we've been treated to the spectacle of an award-winning investigative reporter and an editor with two Pulitzer Prizes getting together to concoct a phony cover story about which company official supposedly hired that editor.

We've seen a pledge taken by the new owners not to meddle in editorial operations revealed as a cheap PR trick. The truth is, the new owners are having a competition to see who can meddle the most in the newsroom. But first, they have to declare that every decision, such as hiring a new editor,  is a business decision rather than an editorial decision. Then they can dispense with that worthless non-interference pledge and meddle to their hearts' content.

Today in Courtroom 630, we saw a lawyer for a fired editor toss some dirty newsroom linen at a lame duck publisher, the kind of dirty linen that libel lawyers can only dream about. All in the name of victory.

What a mess. See that building in the picture above, formerly known as the Ivory Tower of Truth? Like a grand dame down on her luck, the Inky has vacated her ancestral home, and now she's holed up in a vacant old department store on Market Street. The value of the city's paper of record has dropped in just six years from $515 million to $55 million. When they get through in Courtroom 630, it might be time for a flea market.

The fun started this morning when Inquirer publisher Bob Hall was being questioned about the legal opinion he solicited from the Cozen O'Connor law firm that said that Publisher Hall had the right to fire Editor Bill Marimow.

That's what the lawsuit in Courtroom 630 is ostensibly about. A majority group of owners led by George Norcross III gave Bob Hall the green light to fire Bill Marimow. A minority group of owners led by Lewis Katz and G.F. "Gerry" Lenfest subsequently filed suit, asking a judge to reinstate Marimow and terminate Hall.

So far, the judge has denied an injunction that would have terminated Hall, and taken under advisement an injunction that would have brought back Marimow. That means Hall is back in business as a lame-duck publisher until Dec. 31, while Marimow's fate remains up in the air. Meanwhile, the legal death match continues in Courtroom 630 over what the case is really about, namely a wrestling match among rich guys for control.

As George Norcross allegedly warned union workers, "Trust me, this is not going to be pretty."

Today in court, lawyers for the Katz-Lenfest team were cross-examing Hall about that legal opinion he obtained without the knowledge of the minority ownership faction.

Who told Hall to hire the Cozen law firm?

"Mr. Norcross," Hall testified. "He made the first contact" with Cozen.

Did Hall know that Norcross's insurance agency provided insurance to the Cozen law firm?

"I did not know that, no sir," Hall replied.

Norcross wasn't in the courtroom today. He's the executive chairman of Connor Strong & Buckelew. According to a source close to the situation, Connor Strong & Buckelew is an insurance broker, so "Cozen doesn't really purchase insurance 'from' them -- but rather through them."

When you're a damsel in distress like the Inky, however, and you eagerly hop in bed with every suitor that comes along, expect to field questions the next morning about your virtue.

But hey, they've already done worse.

Let's see, in the last round of corporate romance, the Inky fell for pitch man Brian Tierney, and Ed Coryell, head of the Philadelphia Carpenters Union, who was sitting on a fat pension fund.

People noticed that after Coryell became an Inky owner, all editorial criticism of his goon squad down at the Convention Center ceased. Tierney left an even bigger public stench. He's the former spinmeister for the late great archbishop of Philadelphia, some guy named Bevilacqua who, according to a grand jury report, successfully orchestrated a coverup that kept 63 predator priests out of jail, guys in collars who had raped and sexually abused hundreds of innocent children.

Tierney drove the Inky into bankruptcy before bailing with a $300,000 golden parachute; then he came back earlier this year to take a $25,000-a-month sales consulting gig. Over the first four months of his contract, Tierney got paid $87,500 in exchange for bringing in zero new accounts and zero new revenues.

Norcross fired Tierney; Katz wants to bring Tierney back as a salesman, and pay him more money.

Katz's buddy, Lenfest, has proposed bringing Tierney back as publisher. Norcross has said, over my dead body.

Next, the Inky was getting ready to jump into bed with former Governor Ed Rendell. Fast Eddie had already bought the flowers, warmed up the Barry White music, and he had the cheap champagne on ice. Fortunately, cooler heads prevailed, and they convinced the governor to take a powder for the good of the team. But hey, let's welcome to the party George Norcross, the Democratic boss of South Jersey, and Lewis Katz, a top Democratic fundraiser.

Who's meddling more? Katz and his girlfriend, the Inky city editor? Or Norcross and his daughter, the 26-year-old corporate VP who oversees philly.com?

That's what the legal combat in Courtroom 630 has come down to.

During cross-examination, Katz's lawyers asked Bob Hall if it was true that Katz blocked Norcross's candidate for president of philly.com? He did not name that candidate, but everybody in the room was guessing Lexie.

And was it true, Mr. Hall, that Norcross retaliated by torpedoing the next three candidates for president of philly.com that had been recruited by an independent search group?

"I don't know if that's a fact," Hall responded.

If this is a street fight, you have to like the odds of the guy who takes out three of your guys for every one of his.

The next line of questioning by Joseph R. Podraza Jr., on behalf of the Katz ownership faction, began with, isn't it a fact Mr. Hall, that you yourself like to meddle in the newsroom? The lawyer brought up one example of alleged "interference."

Mr. Hall, didn't you take it upon yourself to go out in the Inky newsroom and meddle with  editor Marimow, Podraza said. Didn't you take Marimow to task for an investigative story that targeted Pennsylvania Supreme Court Justice Seamus P. McCaffery and his wife, for some legal referrals she made?

Mr. Hall, didn't you tell Marimow that you "did not believe it [the story] belonged on Page 1?"Podraza asked.

Mr. Hall, didn't you tell Marimow the story was "seriously flawed" because it "implied" that both McCaffery and his wife "had done something wrong?"

To the disappointment of libel lawyers everywhere, the questions Podraza asked were objected to by team Norcross's lawyers. The judge shut down the line of inquiry by sustaining the objections.

Podraza, however, had another fastball coming.

Mr. Hall, didn't you tell another employee, Podraza asked, that the upcoming ownership battle between Katz and Norcross was going to be like "the Allies vs. the Axis powers?" Mr. Hall, didn't you say that "No one can be Switzerland?" And, Mr. Hall, didn't you say, "I'm with Norcross."

When Podraza repeated the question, the lawyer claimed that Hall's alleged comments were made to associate publisher Mike Lorenca.

Hall was wondering whether Katz's lawyers had any of this stuff down on paper.

"I would have to see where it said that," the wily publisher said.

Shortly after, the judge sent everybody home for the day.

The Inky death match resumes at 10 a.m. Wednesday in Courtroom 630, when George Norcross is expected to take the witness stand. Come early if you want a ringside seat.

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