MaineToday Media sued for not paying for paper

By Judy Harrison, BDN Staff
Posted Nov. 02, 2011, at 6:22 p.m.

PORTLAND, Maine — MaineToday Media Inc. is being sued by a North Carolina paper company that alleges it was not paid for tons of paper delivered to the publisher of the Portland Press Herald and other newspapers.

The lawsuit, filed Tuesday in Cumberland County Superior Court, also reveals that MaineToday is working with a Boston company to restructure its debt.

The suit was filed by McGrann Paper Corp. of Charlotte, N.C. The paper company is seeking payment of more than $124,000 in unpaid bills for more than 300,000 pounds of paper.

MaineToday Media owns the Portland Press Herald, Maine Sunday Telegram, Kennebec Journal and Waterville Sentinel.

MaineToday’s attorney Robert J. Dehney of Delaware, Md., said Wednesday that he could not comment on the lawsuit because he has not seen the paperwork.

The lawsuit originally was filed in U.S. District Court in Portland. The federal action was withdrawn Tuesday when a similar complaint was filed in state court for jurisdictional reasons, according to Susan Driscoll, the Portland attorney representing McGrann.

The complaint claims that between Aug. 18 and Sept 26, McGrann delivered to MaineToday 305,351 pounds of specialty paper worth $124,061.27. The company is asking that it immediately either be paid in full and/or any unused paper be returned.

Adam McGrann, the paper company’s chief operating officer, filed an affidavit with the lawsuit in which he accused MaineToday of stockpiling paper knowing it could not pay for it.

McGrann also said MaineToday is “undergoing financial restructuring” and that all financial decisions about paying MaineToday’s vendors on past-due amounts are now made by CRG Partners, a firm specializing in restructuring companies. McGrann also said that his efforts to deal with CRG had been unsuccessful.

The lawsuit comes on the heels of the announcement of staff reductions and the CEO’s announcement that he would step down at the end of the year.

Richard Connor announced Friday that he was resigning as CEO of MaineToday Media effective Dec. 31. The same day a short story on the website of The Times Leader in Wilkes-Barre, Pa., reported that Connor also is stepping down from his position as editor and publisher of that paper. He also is resigning as CEO of Impressions Media, which owns The Times Leader, the Sunday Dispatch, Go Lackawanna, The Dallas Post, The Abbington Journal, the Weekender and other websites.

The Bangor native cited personal reasons for his decision.

The Press Herald underwent a round of layoffs last month, both voluntary and involuntary, that resulted in 61 job losses. Thirty-eight workers were laid off and another 23 agreed to voluntary buyouts.

Connor had blamed a decline in advertising revenue for the cuts, most of which affected the newsroom.

After Connor and others bought the paper in 2009, the company sold many of its physical assets in the state, including its offices in downtown Portland. Earlier this year, the company sold its Western Avenue property in Augusta that had housed the Kennebec Journal.

Employees of both newspapers moved to other offices in Portland and Augusta.

http://bangordailynews.com/2011/11/02/business/mainetoday-media-sued-for-not-paying-for-paper/ printed on September 20, 2014