Lawyers, Grudges and Money: 3 Key Takeaways from Thursday’s Inquirer Ownership Slugfest

Lewis Katz (center) walks to court Wednesday. Photo | AP / Matt Rourke.

The war at the Philadelphia Inquirer will go on, with publisher Bob Hall still in charge and editor Bill Marimow waiting till next week to learn of his own fate.

Hall, who fired Marimow in early October, triggering these legal proceedings, ended the day on the stand, explaining how he reached his decision to fire the two-time Pulitzer winner, Marimow.

As Hall explained it, his decision was simple: He had a list of “action items” for Marimow to follow up on, including the dismissal of multiple editors. Marimow moved slower on some items than others, over a period of months, but he never budged at all on the personnel decisions.

First, testified Hall, Marimow talked up the journalistic merit of the staffers Hall targeted. Then he said there were other positions in which he could use them. Hall, however, just wanted them gone — he said, to change the culture of the Inquirer. So, when Marimow wouldn’t fire them, he fired Marimow.

But that, of course, like just about everything else among the Inquirer’s ownership, is a matter of dispute.

The hearing, which started yesterday at City Hall, has oftentimes seemed less like a legal proceeding than a simple grudge match — with fabulously wealthy men and phalanxes of attorneys with expensive smiles squaring off to settle scores.

Entrepreneur Lewis Katz and H.F. Gerry Lenfest filed suit on October 10th for a mandatory injunction that would reinstate Marimow as editor of the Inquirer and remove Hall as publisher. The suit names Hall and Interstate General Media, the consortium of local businessmen who last spring ponied up $55 million to acquire the Inquirer, Daily News and philly.com, as defendants.

The Katz-Lenfest suit claims Hall didn’t have the authority to fire Marimow. For one thing, they argued, Hall didn’t have a valid contract. Secondly, they point to the operating agreement they signed on to as members of IGM, which states a two-man management committee will oversee the company with the “right, power and authority to make decisions with respect to all business and operational matters.”

The committee, however, made up of Katz and Jersey democratic party boss and insurance mogul George Norcross, just can’t seem to agree on most anything at all, and so the war is on.

Here are the Top 3 takeaways from Thursday’s proceedings:

3. Hall Stays

Much of today’s proceedings revolved around the status of Hall, a publisher with more than 30 years experience who, according to testimony, started talking about retiring, going into part-time status or consulting, late last year.

Katz, on the stand for most of the day, said he had no interest in a part-time publisher but for most of 2013 that’s pretty much what he had, complaining that Hall often continued to lead meetings on his cell phone, sometimes from a Florida golf course, and sometimes his battery died. Katz says he groused about the circumstances, and received assurances that a search for a full-time publisher would begin — but it never happened.

Katz’s attorneys argued that Hall’s original contract ran out in December 2012, giving him no real status by October, when he fired Marimow. But Team Norcross’s attorneys presented a May exchange of emails in which Hall said he’d stay on through the end of this calendar year and Katz replied okay. Not surprisingly, once that email emerged, Judge Patricia McInerney denied the Katz-Lenfest team’s appeal to remove Hall.

She ruled, however, that she would hold the issue of whether Bill Marimow would be reinstated as editor “under advisement,” meaning she’d hear more testimony. Norcross’s attorneys, for the defense, then called  Hall. They also told the media gaggle that swarmed them afterward that Hall would continue testifying Friday, during an abbreviated hearing, to be followed, on Monday, by Norcross himself. (Hall never gave his own account of where he’s been working from or if he ever actually ran a meeting by cellphone from the golf course.)

2. The Info Leaks Appear Incredibly Strategic

The last couple of weeks were marked by a series of leaked emails among Interstate General Media board members and publisher Hall.

One thing that wasn’t leaked, however, were the emails in which Hall and Katz seemed to agree that he’d stay on through the end of the year. Surprise! But the question, heading into tomorrow and Monday, is if there are any other key emails yet to surface…

1. This Was Never Going to Work

So far, we’ve learned that Hall never wanted Marimow as editor of the Inquirer and that Katz, the parking entrepreneur, and Norcross, the insurance guy, had no real relationship before they decided to form a two-man committee that has to agree on every major decision regarding a major multi-media company. And this sounded like a recipe for success to whom, exactly?

Katz claimed, on the stand, that he never believed Hall wanted to fire some of Marimow’s lieutenants to “change the culture.” He believed Hall was just acting on behalf of Norcross. These targeted editors all had disputes, Katz said, “with a family member of my co-partner on the managing committee” — seemingly a thinly veiled reference to Norcross’s daughter, Lexie, who has been serving in a leadership capacity at philly.com. There was no specific evidence presented to back up this claim. Katz also said that, though he was denied his rights as a co-managing partner when it came to firing Marimow, he did successfully block a Norcross nominee for president of philly.com . This, too, seemed like it might be a reference to Norcross’s daughter. But after court let out for the day, a source close to the situation said Lexie was never the subject of any blocking rights.

Judge McInerney, attorneys for both sides and the witnesses struggled to keep specific names out of testimony, referring mostly to “editors” who Hall wanted to fire. But some names did leak out. At one point, Katz said the name of a “Ms. Phillips” appeared on a list of potential dismissals. This seemed a reference to Nancy Phillips, currently Inquirer city editor, who has also been Katz’s longtime romantic partner and, according to testimony, played a starring role in hiring Marimow at IGM.

If so, it would mean Hall wanted to fire Katz’s girlfriend.

Rich guys. High powered attorneys. Daughters. Lovers. The case of Katz-Lenfest vs. IGM has everything but a solution.