Thursday, November 14, 2013

Judge Reinstates Inky Publisher, But Not Inky Editor

By Ralph Cipriano
for Bigtrial.net
George Norcross (center)

Judge Patricia McInerney today denied a motion for a mandatory injunction that would have fired Philadelphia Inquirer Publisher Bob Hall. She took under advisement a request for another mandatory injunction that would have reinstated Inquirer Editor Bill Marimow.

The judge's rulings left Hall, the guy who fired Marimow, still in office while Marimow remains in a state of suspended animation. It was a victory for George Norcross, the South Jersey political boss who heads up a majority slate of new Inky owners. And it was a defeat for Lewis Katz, former owner of the New York Nets, who heads up a minority group of owners.

A lawsuit filed in Philadelphia Common Pleas Court claimed there had never been a "mutual agreement to further renew" publisher Hall's contract past an expiration date of Aug. 31. The rehiring of Hall had to be approved by a two-member management committee consisting of Norcross and Katz, the Katz lawsuit said.

Lewis Katz (center), with Nancy Phillips and son Drew
"Lewis Katz did not approve, and under no circumstances would Lewis Katz have approved, the renewal of Hall's contract of employment for any period of time after its expiration on Sept. 1, 2013," the lawsuit said. The timing was critical, as the Katz lawsuit alleged that Hall was working without a contract when he fired Marimow on Oct. 7.

Katz's case fell apart in court today after lawyers for Norcross entered into evidence a May 17th email exchange between Katz and Hall that stated Katz had agreed to retain Hall as publisher until Dec. 31.

The judge decided there was "no clear right to remove" Hall, said David H. Pittinsky of Ballard Spahr, a lawyer who represented Hall. The attempt "to oust [Hall] has now been rejected by the court," Pittinsky said. He declined comment on the status of Marimow.

Richard A. Sprague, the lead lawyer for Katz, left the courtroom without speaking to reporters. Katz left early. Marimow declined comment, saying he didn't want to talk until the case was all over.

On the witness stand today, Katz testified that former Inky publisher and CEO Greg Osberg was not a fan of Bill Marimow's. "He was vehemently opposed" to bringing back Marimow as editor, Katz testified.
George Norcross

As for Bob Hall, who succeeded Osberg as publisher, "he was more vehemently opposed" to re-hiring Marimow, Katz said.

Did this kind of strident opposition give you any concern about bringing back Marimow as editor, Katz was asked.

"None sir," Katz replied.

Katz recalled a meeting with Hall where the publisher told him he had health problems.

"He got very emotional," Katz recalled. Hall said he had to "leave his job and he must quit by year's end."

Katz said he repeatedly told Hall he wanted to replace him with a full-time publisher. But then he found out that Hall had become a part-time publisher who had apparently worked out a deal with Norcross to stay on the job.

"He [Hall] was very evasive" about explaining that deal to him, Katz said. Katz said he never approved the decision to retain Hall a part-time publisher. He complained that Bob Hall spent the winter in Florida and frequently called into company board meetings from a cell phone on a golf course. Often, Hall's cell phone would run out of batteries during long meetings, Katz said.

Gerry Lenfest and Bill Marimow
Meanwhile, Katz testified, Norcross told Katz he wanted to retrain Bob Hall so that Hall would stay on the corporate ladder between Norcross and Marimow. Then Norcross came to the decision that Marimow had to go.

"Mr. Norcross wanted Mr. Marimow out," Katz testified. Hall felt the same way, Katz said.

But Katz wanted Marimow to stay, and so he explained on the witness stand how he drew a line in the sand. Katz said he told Hall, "this is the rubicon. If you try to do something here, I'm gonna file a suit."

Katz said that Norcross was determined to fire Marimow. Katz said Norcross told him "it was the worst decision he made in the shortest period of time" to hire Marimow.

But Katz didn't agree.

"I felt Mr. Marimow was doing a wonderful job," Katz testified.
Bob Hall

Katz said at a meeting in July, he had balked at Hall's plan to fire three of Marimow's top editors.

"I didn't really believe that it was Mr. Hall who wanted these things done," Katz testified. He said he believed that Norcross was behind the proposed firings. Katz said he suspected that the three editors targeted for firings had been singled out because they had clashed with a member "of my co-managing partner's family.

It appeared to be a thinly veiled reference to Norcross's daughter, Lexie. She's the 26-year-old VP of digital operations and corporate services for Interstate General Media [IGM], owner of the Inquirer, Daily News and philly.com. Several Inky sources say that Lexie Norcross was in charge of the philly.com website and frequently crossed swords with Inky editors.

Katz testified that Hall had also targeted Nancy Phillips to be fired. Phillips is currently the Inquirer city editor who is Katz's longtime companion. But in his private emails, Bob Hall had repeatedly claimed that Katz and Phillips were interfering with Hall's plans for the newsroom by encouraging Marimow to drag his feet on changes Hall wanted to make.

It was quite a reversal of fortunes for Phillips, the Inquirer's award-winning investigative reporter. The previous year, Phillips, then just a reporter and a member of the Newspaper Guild, had worked as a corporate head hunter for the Inky's new owners, recruiting Marimow as editor.

From the ranks of a reporter, Phillips was elevated under the new ownership to assistant to the publisher. Then she was promoted to city editor. Her annual salary was boosted from $78,865 to $106,000 at a time when 550 other Guild employees, as well as about 30 non-union managers, were being hit with 2 1/2 half percent pay decreases, plus two weeks of annual unpaid furlough.

"Miss Phillips, who's been there 30 years," Katz said, and "suddenly" she was "to be fired."

Publisher Bob Hall testified that at a meeting in July, Marimow was informed that his "job was in jeopardy" if he didn't make some changes. Hall wanted Marimow to get rid of some top editors, and use the savings to hire young reporters to cover the suburbs. But Marimow balked at getting rid of his top lieutenants.

The key email exchange between Hall and Katz took place on May 17, 2013.

At 6:33 a.m., Katz wrote Hall, Norcross, Lenfest, associate publisher Mike Lorenca and three others, "I am not in favor of hiring a CFO UNTIL WE HIRE A CEO. I've expressed this to Bob, so I assume he's told George. I think the new CEO should have the prerogative of picking his subordinate since presumably he will be working for him."

At 8:19 a.m. Hall sent an email back to Katz, which he copied to Norcross, Lenfest, Lorenca and three others: "Lewis and I did talk about this. I indicated and he agreed that we would start search for new CEO in the fall and I would be around until the end of the year."

"I indicated to him that it is not necessary for CEO to pick his team as it is done both ways all the time." Mike [Lorenca] and I believe that we should start process. So the owners can decide on the direction."

"Thanks. Bob."

When shown the emails, Katz said he must have talked it over with Hall, and agreed to let him stay on until Dec. 31.

Lewis Katz and Richard A. Sprague
At today's hearing, the only good news for Katz was that the judge turned down a request for an injunction to investigate Katz's actions as a board member of IGM.

The judge still has to decide Hall had the right to fire Marimow, or whether that decision was up to IGM's management committee, which consists of two feuding members, Katz and Norcross.

The judge also has to decide whether the Inquirer would suffer irreparable harm if Marimow is not reinstated as editor.

Marimow is working under the terms of a two-year contract that pays him $257,000 a year. The editor had offered to take a 20 percent pay cut when he took the job last year, to set a self-sacrificing example for the troops and management to follow, but IGM's new owners told him it wouldn't be necessary.

Since he was fired Oct. 7, Marimow is still getting paid. His contract expires April 30.

While Marimow's status remains up in the air, lawyers for Norcross offered to reinstate Brian Tierney as a sales consultant, at Katz's request.

Tierney was getting paid $25,000 a month as a sales consultant, but did not bring in any revenues during the first four months of his contract, according to a confidential management analysis. Tierney, a former Inky publisher and owner, was originally recruited to return by Phillips, at at time when she was working as a corporate head hunter. Katz had complained on the witness stand that he was never consulted before Norcross fired Tierney.

That prompted Norcross's lawyers to tell Katz in the courtroom they would bring Tierney back if that's what Katz wanted. So do you want to bring back Tierney, Katz was asked.

"Absolutely," Katz replied. But it was hard to tell whether the exchange was just for show, and whether anybody at the struggling company really wanted Tierney back as an under-peforming sales consultant for $25,000 a month.

The feuding partners had little to say to each other during today's hearing. But as he was leaving the courtroom, H.F. "Gerry Lenfest, the owner who had filed suit with Katz, turned to Norcross and said, "Good night, George."

"Good night, Gerry," Norcross replied.

Testimony resumes tomorrow in the case at 10 a.m. in Courtroom 630 at City Hall.

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