L.A. Times and OC Register Go to War

     LOS ANGELES (CN) – Los Angeles Times and Orange County Register have engaged in protracted finger-pointing in their legal wrangle over millions of dollars in delivery fees, with both parties accusing the other of making baseless allegations.
     Los Angeles Times sued the Register in October last year in Superior Court, claiming the Orange County paper had fallen behind on delivery fee payments under a 5-year-old agreement and owed almost $2.5 million .
     The Register, owned by Aaron Kushner’s Santa Ana-based Freedom Communications, countersued in January , calling the Times a “bully.”
     The Register claimed the Times breached the agreement by disrupting deliveries, to hasten the Register’s demise.
     In a flurry of court filings this month, the parties appear to be stepping up the court battle.
     On Feb. 4, the Register filed a motion for a judgment to strike five of the Times’ eight causes of action. The Register claims there was never a valid contract and that the Times failed to support claims of unfair competition.
     The Register offered a withering assessment of the Times’ decision to level negligent misrepresentation claims against Kushner, calling the legal maneuver “unsavory” and “defective.”
     The Times had claimed that after some back and forth, Kushner on May 29 agreed by email to pay the Times in installments.
     After paying $600,000, however, the Register broke that promise, the Times claimed.
     To support its claims, the Times attached an exhibit of emails between Eddy Hartenstein, chairman of the board of Times corporate parent Tribune Publishing, and Kushner.
     “Eddy, thanks for your note and your patience. We’d be fine working out a payment plan to bring the outstanding balance down over the next few weeks,” Kushner wrote in an email to Hartenstein on May 16, 2014. “The timing of May 30 is unfortunately not a good timing given the vagaries of how it falls in the month, but a first date for reduction of Friday June 6 should work. I checked on the balance you reference, and it includes everything owed (vs amounts that are over term) – that said, we want to get to terms as I know do you.”
     In its motion for a judgment on the pleadings, the Register said the emails failed to support the Times’ allegation of fraud or misrepresentation.
     “Mr. Kushner’s statements were plainly a fragment of an ongoing negotiation – one which broke off without ever concluding,” the Register says, adding that “there is no promise or misrepresentation – merely, a statement of bargaining position that rejects some of the terms proposed by the other party.”
     The Times last week filed a motion to strike portions of the Register’s counter-suit for breach of contract. It hit back at the Register’s claims that the Times was in breach for failing to help the Register with deliveries while it transitioned to a new distributor.
     Under the distribution agreement, the Times was under no obligation to provide “transition services” after the contract was terminated, the Times said in its Feb. 11 filing in Superior Court.
     The Times filed a separate objection on the same day, asking the court to dismiss the Register’s indemnity claim.
     In its demurrer, the Times accused the Register of trying to “jam a square peg … into a round hole.”
     The Times claimed that the distribution agreement applied only to claims against third parties and prohibited the Register from making a direct claim against the Times.
     “The Register seeks to recover millions of dollars in consequential, indirect, special and incidental damages from The Times, based on the flawed theory that The Times should be responsible for any and all expenses The Register claims to have incurred as a consequence of The Times’ lawful termination of the parties’ distribution agreement for non-payment,” the demurrer states.
     Kushner foresaw big things after his company Freedom Communications took over the Register in 2012.
     “I do not believe the future of newspapers has to be a negative one,” Kushner said in 2013, “I believe that there is a future for newspapers where they grow.”
     Instead, the Register’s fortunes quickly took a turn for the worse. Kushner’s Los Angeles Register folded within five months of publication, and the Long Beach Register shared the same fate. After the Times lawsuit, Freedom announced a round of layoffs.
     Kushner stepped aside after the Register’s dismal year drew to a close, with former Las Vegas casino marketer Rich Mirman taking his place.
     Kushner remains the principal of Freedom Communications, which he owns through a private equity firm.
     In December, Los Angeles County Superior Court Judge Robert O’Brien entered a temporary protective order against the Register. That order, extended in January, includes the Register’s bank accounts, stocks, bonds, securities and brokerage accounts, real estate and real property.
     The parties are due to appear in court again on March 3.
     Freedom Communications did not respond to an emailed request for comment. A Tribune Publishing spokesman could not be reached after business hours Thursday.

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