Infighting, financial troubles and alleged elaborate schemes for ultimate control came to a head last month at The Bellingham Weekly, contributing to the cessation of the alternative news, arts and entertainment publication.
As of Jan. 6, the latest plans at TBW, which began publishing in April 2003, were for the paper to go into a “hibernation phase” until at least this spring, according to its publisher and owner Doug Tolchin.
“During its winter hibernation phase, the Weekly will be busy undergoing an internal transformation making possible a more sustainable, balanced, important and thoroughly enjoyable cultural resource,” wrote Tolchin earlier this month in a letter to readers, in a meager, four-page edition of the paper.
In recent months, Tolchin, who said he’d covered more than $100,000 per year in cost overruns since becoming publisher of the paper, had been in negotiations to get out of he newspaper business.
Atomic Telegraph, the corporate entity of TBW, has been saddled with financial problems, and had a $49,063 lien placed on it on Oct. 24 for unpaid IRS taxes.
In the latest edition of TBW, Tolchin said he had been in talks with David Syre, in which the Trillium Corp. president would purchase his interest in the paper.
Tolchin, however, said Syre backed off on the deal last month.
In his letter in the “hibernation edition” of the paper, Tolchin said he terminated Johnson’s employment on Dec. 13, after he allegedly uncovered a plan in which Johnson, with the help of others, would become sole owner of the paper by attempting to force dissolution and liquidation of the company.
Johnson had served as TBW’s managing editor since its inception and founded the paper’s predecessor, The Every Other Weekly, in 1997.
The approximately 10 other employees at TBW are also not guaranteed jobs when the paper starts publishing again.
During TBW’s hiatus, Tolchin, in his letter to readers, said he plans to:
• Assemble a team of core staff members and community contributors.
• Hire a new managing editor.
• Clear the paper of all debt.
According to Johnson and other former employees at the paper, the final days and weeks at the paper were an emotional roller coaster ride.
Johnson said he had reached an agreement in principle in early December to buy Tolchin out from the LLC for $50,000, and that Tolchin initially accepted — but changed his mind at the beginning of the week.
Johnson estimates that Tolchin has invested more than $300,000 in the publication to date, but his refusal to be bought out means he will remain saddled with debts to the IRS and to its printers, and since the newspaper has ceased publication, there is no way to bring in revenue to offset these debts.
Johnson said his office computer and cell phone were seized Dec. 13, and he was forcibly removed from the paper’s office.
“I was terminated improperly, without cause. There were no grounds,” Johnson said.
Johnson said he has one of two avenues to follow to begin publishing again: He can fight Tolchin through the legal system for ownership of Atomic Telegraph, in the hopes that he can eventually gain the rights to publish the Weekly once again; or he can have himself removed from Atomic Telegraph altogether, which has a non-compete clause for its members. Once removed, he would be free to start a new publication if he so chose. Johnson added that he doubts Tolchin will resume publication of TBW.
“Doug has chosen to destroy the paper rather than just walk away from it,” Johnson said. “A lawsuit remains a strong possibility for me, but I don’t really want to get into all that mess — I just want to publish the paper.”
In legal documents obtained by The Bellingham Business Journal, Johnson cited several alleged incidents between Tolchin and himself that contributed to the demise of the independent weekly publication.
Increasingly, since early 2003, when the two formed Atomic Telegraph, the LLC that owns the paper, Johnson and Tolchin have been at odds over the paper’s management, content and future.
According to court papers prepared by Johnson’s attorney, Murphy Evans, and other public information, what follows is a timeline of events Johnson believes contributed to the failed partnership. Tolchin has not returned calls for comment to the BBJ.
January 2003: Tolchin first considers stopping his financial contributions to the paper. As an infusion of money is needed to continue operating the paper, Tolchin threatens that unless Johnson signs a document reducing his ownership in the LLC, he will terminate his financial contribution to the Weekly, a move that will likely cause the publication to fold.
Tolchin proceeds to appoint himself the paper’s publisher, usurping some of Johnson’s control and, in the opinion of Murphy, breaching numerous obligations described in the document signed by Johnson.
January 2005: Tolchin informs Johnson that The Weekly had never once filed a federal payroll tax return and has not met its payroll tax obligations to the IRS.
Tolchin takes control of some editorial content of the paper and removes the sales department from Johnson’s management, which Johnson said breached the LLC agreement.
April 2005: IRS agents visit Johnson and inform him the company is in default of its payroll taxes. Johnson relays the message to Tolchin.
June 2005: IRS agents inform Johnson that Tolchin still has not made contact with them.
Tolchin sells the building where The Weekly’s offices are located. Tolchin negotiates a new lease for The Weekly — in a smaller space, for more money. Johnson said he was not consulted on this decision.
July 2005: Tolchin meets with Johnson to discuss the IRS situation. Tolchin tells Johnson that Johnson is the 100 percent owner of Atomic Telegraph and responsible for the IRS debt.
Later that month, in a meeting with the company’s bookkeeper, Tolchin urges Johnson to tell the IRS that he (Johnson) is the sole owner of Atomic Telegraph. Tolchin explains that because Johnson has few personal assets, the company will be in a better negotiating position if the IRS does not discover Tolchin is also an owner of the company. Johnson refuses to follow through with the suggestion.
August 2005: Tolchin again announces his desire to sell his interest in the paper.
A disagreement between Johnson and Tolchin, over the dismissing of an employee, prompts Tolchin to send Johnson a strongly worded e-mail about Johnson’s future with the paper.
Among other things Tolchin said in the e-mail:
“Although you chose non-cooperation in response to my repeated requests in this matter, as well as most other matters, you will comply with the letter and spirit of this directive or this matter will escalate dramatically into a series of events which you will not like…”
“Our partnership will soon be over, one way or another, for which I am grateful, enthusiastic and highly committed. Between now and then, I recommend that you cooperate with me wholeheartedly and cheerfully. The quantity and quality of your cooperation with me, or lack thereof, will affect the quality of your future and finances much more than mine. You will find me extremely responsive from this point forward, rewarding those who genuinely assist me in a good-natured manner and quickly eliminating from within my circle of relationships those who do not…”
October 2005: Atomic Telegraph has a $49,063 lien placed on it for unpaid IRS taxes.
Dec 9, 2005: After Johnson fails to return a phone call from Tolchin, Tolchin orders building maintenance to change the locks to The Weekly’s office.
Dec. 11: Tolchin apologizes and reopens the office.
Dec. 12: Tolchin has a courier read a letter to The Weekly’s staff announcing Tolchin’s intent to withdraw from the business.
Dec. 13: Tolchin announces he is closing The Weekly, terminating Johnson and the paper’s 10 staff members; Johnson turns over his computer, files and cell phone and is escorted out of the building.
Dec. 14: Tolchin again holds a staff meeting and announces he is closing the office immediately.
Dec. 15: Johnson, in Whatcom County Superior Court, is granted a temporary restraining order against Tolchin so he can print last week’s edition of the paper.
Dec. 22: Johnson’s work computer, which may contain sensitive information, will be held in Whatcom County Superior Court, ordered Judge Ira Uhrig, while the dispute between Johnson and Tolchin continues.
Jan. 2006: Tolchin publishes a four-page issue of TBW, detailing future plans for the struggling paper, including its intention to go into “hibernation” for several months with the goal of operating again this spring.
— by J.J. Jensen and John Thompson