Judge gives OK for trustee to examine Rogoff finances
A public trustee will be allowed to look at bank statements, cancelled checks and documents related to a $13 million loan taken out by former Alaska Dispatch News owner Alice Rogoff.
At a Jan. 18 hearing, U.S. Bankruptcy Judge Gary Spraker said the permission comes with conditions to protect confidentiality, but he ordered that outright objections to looking at “certain” documents on the part of Rogoff’s Northrim Bank attorney are too vague and need to be spelled out more specifically.
He said he’s “not going to rule on the question en masse.”
The bankruptcy case, filed as a Chapter 11 reorganization on Aug. 12, 2017, and converted to a Chapter 7 liquidation after the sale of the company Sept. 11, is still in the discovery phase to find assets for repaying Rogoff’s $2.3 million in debts to dozens of local and national businesses and individuals.
At dispute was whether some cancelled checks and loan documents are deemed to contain private information about Rogoff’s personal finances and marital separation agreement funds from billionaire ex-husband David Rubenstein.
The terms of a divorce settlement and financial amounts agreed to on Dec. 8, 2017, are confidential, Rogoff attorney James Lister has argued in court filings. Lister is with the Washington, D.C., office of Birch Horton Bittner &Cherot, P.C. He traveled to Anchorage for the hearing.
Rubenstein let it be known through his attorney that he is “insisting that the contractual confidentially revisions be enforced, and point(s) to remedies available to Rubenstein under the MSA (marital settlement agreement), if they are not,” Lister argued.
Northrim Bank attorney Michael Parise stated there could be confidential information on the back of cancelled checks. He also argued that 3,000 emails and other communications relating to Rogoff’s Northrim loan may contain confidential information related to Rogoff’s marital separation agreement.
Parise also told the judge it’s burdensome to dig out the communications that can be viewed by the trustee, and it’s expensive because an attorney will need to review it all ahead of time.
But Spraker said he wasn’t comfortable hearing so much speculation on what is possibly in the documents.
“The inherent vagueness is concerning,” Spraker said. “We’re talking cancelled checks and bank statements. What is inherently confidential about a bank statement?”
Rogoff borrowed $13 million from Northrim to help purchase the Anchorage Daily News for $34 million in April 2014.
Christine Tobin-Presser, the attorney for public trustee Nacole Jipping, said she didn’t believe she would need to look at the loan documents going back all the way to 2014 at first because the Northrim loan was initially seen as not as relevant.
“The debtor’s assets (the Alaska Dispatch) hadn’t been pledged until March 2017 on the loan,” Tobin-Presser said. “Yet, $60,000-$70,000 monthly payments were made (in the years) prior to that, which the debtor (Alaska Dispatch) had no obligation to pay.”
That’s relevant to the whole picture, she argued.
“Ms. Rogoff had the wherewithal to pay it, yet had the debtor make the payments,” Tobin-Presser said. “Ms. Rogoff was the CFO for U.S. News &World Reports for 10 years and yet she chose to run her business in such a way as to intertwine personal debt with the debtor’s. And it’s relevant.”
Tobin-Presser asked for communications surrounding the loan documents to ascertain why these debts were paid by the Alaska Dispatch and not from Rogoff’s personal accounts.
When Rogoff took out the loan in 2014, she did not list the Alaska Dispatch News assets as collateral.
Rogoff had been separated from her husband, David Rubenstein, since 2005 but had a marital agreement paying her $5 million per year, according to the court filings in another court case involving Alaska Dispatch News co-founder Tony Hopfinger.
Hopfinger co-founded the Dispatch along with Amanda Coyne as an online news publication and sold his interest to Rogoff for $1 million in an agreement signed on a cocktail napkin to be paid in 10 installments over 10 years.
He is alleging that she only made one payment and owes him $900,000. The case is to be argued in Alaska Superior Court in March.
Because the Rubenstein-Rogoff divorce was finalized later, in December 2017, the financial contents of the their divorce also are confidential under the terms of settlement, her attorney Lister has asserted.
She did not put up the Dispatch assets as collateral until reworking the Northrim Bank loan in March 2017.
By then, Rogoff has said the newspaper was financially distressed and the loan had to be renegotiated.
Rogoff’s use of Dispatch funds to pay the Northrim loan may constitute the bankruptcy term “avoidance action,” Tobin-Presser said, which means assets of the Dispatch were not properly applied to it.
Trustee Jipping needs to look at the documents to determine whether that was proper.
She is doing so under the guidance of Tobin-Presser, who is from the law firm of Bush Kornfield LLP of Seattle. Tobin-Presser also traveled to Anchorage for the hearing.
The next hearing will be Jan. 31 at 2:30 p.m.
In the intervening weeks, Spraker ordered the parties to determine amongst themselves how they will handle the confidential information and turn over bank statements, cancelled checks and loan documents that Jipping has a right to review.
If there are objections, Spraker said he wants refined arguments, not speculative or vague ones.
“We need to understand the context and reason for objections… Give that additional attention and then bring it to court,” he told the lawyers.
Naomi Klouda can be reached at [email protected].