Dispute Over Community Newspapers Going to Trial
By CLAUDIA PESCHIUTTA
Staff Reporter
Unable to resolve a dispute with the buyer of five community newspapers, National Media Inc. is set to go to trial in Los Angeles Superior Court on Aug. 26.
The contretemps with Equal Access Media Inc., which last year agreed to buy the Hollywood, Los Angeles, Wilshire, and West Hollywood Independent newspapers and the Westsider for $1 million, centers on more than $600,000 in payments due on the deal.
Pluria Marshall Jr., president and chief executive of Houston-based Equal Access, conceded that payments to National Media have been missed, but noted the companies have “a difference of opinion on the value of the assets.”
Equal Access paid almost $300,000 in cash up front, with other payments due starting July 1, 2001.
The state of the assets Equal Access thought it was acquiring, Marshall said, “are somewhat different than what we ended up with.”
Steve Laxineta, chief executive of National Media, declined comment, as did his attorney, Michael Shilub. The company, based in Rancho Palos Verdes, owns the Beach Reporter, a weekly, and the twice-weekly Palos Verdes Peninsula News.
“The historic information we were provided showed a downward trend (at the Independent papers). Although the trend was down, we believed that with normal business circumstances, we could stem those declines and at least stabilize them,” Marshall said.
Marshall claimed that National Media is barred from taking the matter to court and must “attempt in good faith to negotiate a settlement.”
Equal Access merged the L.A. and Wilshire papers into the Hollywood Independent, and the Westsider was combined with the Culver City Star. The changes resulted in some layoffs, Marshall said, adding that about $50,000 has been invested in the papers.
As for the papers’ financial performance, Marshall laughed and said, “(We) have not made any money.”
Equal Access owns the package of Wave community papers targeting South and East L.A. Marshall told the Business Journal earlier this year that ad revenues at the Wave newspapers saw 7 percent increase in 2001 over 2000.
The company is one of several minority-owned businesses hurt by the collapse of Houston-based energy giant Enron Corp. The media company was among several businesses that received financial backing from Enron Investment Partners, a private equity firm that supported women- and minority-owned businesses.
“We did plan on getting more money from them,” he said. “When they went belly up, it wasn’t a good thing.”
