LOS ANGELES (CN) - The Orange County Register owes the Los Angeles Times $2.5 million for delivering the Register to customers' homes, the Times claims in court.
Los Angeles Times Communications sued Orange County Register Communications on Tuesday in Superior Court.
The Register has been beset with financial problems. Its publisher, Aaron Kushner, owner of Freedom Communications, was replaced Tuesday. Under Kushner, the Register began publishing the Los Angeles Register in April this year, but it folded in September.
In its lawsuit, the Times says that the competing newspapers signed a distribution agreement on July 24, 2009 under which the Times would distribute the Register and other Register publications.
The Times claims that it did a good job, through its independent contractors, in delivering its rival to doorsteps.
By February this year, the Times claims, the Register owed it nearly $2 million in delivery fees.
When the Times asked Kushner to pay down the debt, Kushner offered to pay $1 million, if the Times gave it a good rate on distributing the new L.A. Register, according to the complaint.
"In other words, The Register offered to partially perform on the existing distribution agreement, but only on the condition that The Times give a benefit to a new competitor," the Times says in the lawsuit.
The Times said no thanks, and on Feb. 10 asked Kushner to pay the total debt, according to the complaint.
By May 29, the Register owed more than $3.1 million, $2.8 million of it overdue, the Times says. It claims that Kushner agreed to a monthly repayment schedule that would clear the books by September.
But the Register made only its first payment, of $400,000, in June, and still owes the Times $2,464,000, according to the lawsuit.
In addition to defaulting on the debt, the Times said, the Register has hired another newspaper distributor.
The Times seeks money owed, damages for breach of contract and unfair competition, and a constructive trust imposed on any income the Register made or makes from the conduct alleged in the lawsuit.
The Times is represented by Jean-Paul Jassy, with Jassy Vick & Carolan.
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