Editor's note: From the moment SF Weekly published its first issue as a New Times publication in 1995, Bruce Brugmann, Tim Redmond, and their employees at the Bay Guardian made clear their intention to run us out of town. Brugmann famously said that San Francisco would be our Afghanistan. When all else failed, they sued SF Weekly in 2004 for sales below cost. The nearly $16 million verdict is on appeal.
On Good Friday, April 10, Redmond sent me the following announcement making clear his intent to up the ante. I offer you his words in their entirety, and my response.
I'm working on a story updating the status of our lawsuit. The inferences our lawyers have drawn from the various communications they've received from your legal team post-trial are that:
1. You do not intent [sic] to post an appeal bond, and
2. You believe that the Bank of Montreal and other members of a banking consortium have a prior security claim on all of your assets, and
3. With the cooperation of your lenders, you have sufficient asset protection to render New Times/Village Voice Media in effect judgment proof.
I am told by sources that at some point after we filed our lawsuit, you and [Village Voice Media chief executive officer Jim] Larkin transferred a significant amount of money out of the company and into your personal assets. The figure I've heard from sources is around $15 million.
Do you consider any of the above statements inaccurate? If so, please clear things up for me. If not, would you care to comment on the ethics of a going concern, a newspaper chain publishing 16 papers every week, using asset transfer and protection schemes and significant transfers of assets out of the company to avoid the payment of a legitimate debt?
Have you informed all your other creditors — say, the printers you use and your landlords, vendors, and suppliers — that they will be unable to collect any money you owe them should you choose not to pay because your companies will hold themselves out as judgment proof (because they have no liquid assets that aren't subject to a Bank of Montreal lein [sic] )?
Thanks, I look forward to hearing from you by Monday afternoon for publication in next week's paper.
Here's my response:
April 13, 2009
You are not working on a story. Working on a story would imply an attempt at accuracy. You are working on a sleazy libel.
I do not expect fairness. You have sued us and are, by any reckoning, an enemy combatant armed with anonymous sources (if such sources exist at all).
Let the record speak for itself. You seem to think you hit the lottery; actually, you dirtied your paws with a lawsuit. The case is on appeal. You are not entitled to a penny. You want to be paid before the appellate judges rule? Let me check with my partner, Jim Larkin, and get back to you on that point.
As for your defamation, "I am told by sources that at some point after we filed our lawsuit, you and Larkin transferred a significant amount of money out of the company and into your personal assets. The figure I've heard from sources is around $15 million."
Never happened at that amount; never happened at any amount.
You claim you have sources, plural. Now you have a crystal-clear repudiation. Put your sources on the record. Let the world examine your "evidence."
But Tim, let's consider your attack at face value. If your hook were true — and it isn't — what's your point?
"After we filed our lawsuit, you and Larkin transferred a significant amount of money out of the company."
Were we supposed to stop running our business, stop paying employees, stop making a profit, because Bruce Brugmann hired a lawyer?
Are the assets of our business protected? Of course they are. Are you suggesting that the assets of the San Francisco Bay Guardian Inc. are not?
I'm not going to discuss our banking relationship with a miscreant who makes up slander. Perhaps your lawyers can enlighten you. (But if your lawyers have led you into a blind alley, do you really trust their insight?)
What I will share with you is obvious and plain. When you opted to march into the fever swamp of litigation, we had been in business for decades. We had debts that preceded your imagined claims. Debts, generally speaking, are paid off in the order they are incurred. We shed few tears that the law does not allow you to cut in line.
You know full well that the paperwork on the appeal is about to be filed at the courthouse, and so now you've launched this diversionary attack.
You're frustrated. You want us to give you money, and we won't. You accuse us of having money, while you don't.That has always been your problem. It is the foundation of your lawsuit.
Is it simply class bitterness that causes you to make things up, to envision conspiracies in which someone, somewhere, is having a good time on a nickel they should have thrown into your paper cup? Is this what motivates you to rant with the logic of a desperate street beggar?
Let's examine your thinking: Despite the fact that you argue we are judgment proof, you have us engaged in "significant transfers of assets out of the company to avoid the payment of a legitimate debt." Never mind that it didn't happen. Never mind that, had it happened, it wouldn't have been illegal: Why would we do that if we were judgment proof?
You couch your sophistry to make it look as if we have looted and pilfered and scheduled the Sabine women on our to-do list.
Yet through years of discovery and trial, no such allegations were raised by your attorneys, who looked carefully at our finances.
In fact, what emerged at trial was the willingness of Bruce Brugmann and the rest of the Bay Guardian's business staff to lie repeatedly, knowingly, and disgracefully.
Brugmann and his collaborators testified under oath that their business was not affected by Craigslist, the Internet, the dot-com bust, 9/11, the recession, or competition from other media. This made the Bay Guardian not only the sole publication in San Francisco to escape such impact; indeed, it was also the only publication in America that suffered not at all. Incredibly, it was SF Weekly alone that hurt the otherwise-impregnable Bay Guardian.
Brugmann testified under oath that just as the economy collapsed in 2002 following the 2001 terrorist attacks in New York, he leaped into real estate speculation and foolishly signed up for a multimillion-dollar debt load. This allowed the Brugmanns, as landlords, to squeeze money out of the paper as they were laying off editors and writers. While advertising revenue dwindled, the Brugmanns doubled the Bay Guardian's rent payments to Bruce and Jean from $28,000 a month to $55,000 a month.
What emerged at trial, Tim, was that you said you wanted to run us out of town.
Your attorneys argued in open court that the solution to competition was price fixing, a scheme intended to screw the small, local businesses that are the foundation of both our papers.
So that's the way you do it, Tim?
Money for nothing and your chicks for free.
Michael Lacey is executive editor of Village Voice Media (formerly New Times), which owns SF Weekly.