UPI Talking About Rehiring Fired Managers
Facing mounting pressure from employees and their primary banker, the owners of United Press International held talks Tuesday about rehiring the executives they had fired two days before and relinquishing ownership of the imperiled news agency.
Sources within UPI said it was possible that an agreement might be announced overnight in which principal owners Douglas Ruhe and William Geissler would surrender most of their 90% interest in the news agency to its biggest creditors.
Those creditors include Foothill Capital Corp., a Los Angeles venture-capital firm; American Telephone & Telegraph Co.; American Express Co., and RCA Corp.
Under pressure from UPI’s major union, UPI executives and particularly from Foothill, Ruhe also met in Los Angeles with Luis Nogales, the president whom Ruhe had fired Sunday over a disagreement about restructuring the company. UPI’s major union is the Wire Service Guild, which is an affiliate of the Newspaper Guild.
In meetings with Foothill and with Newspaper Guild representative Richard Pattison, Ruhe reportedly discussed relinquishing operational control to Nogales and Ray Wechsler, a financial consultant whom he also had fired with Nogales on Sunday.
3 Others May Return
Sources within UPI said three other top UPI executives who resigned Monday over those firings were also considering returning. Those executives were Jack Kenny, vice president and controller; Bob Brown, vice president for communications, and Steve Spritzer, a budget officer.
According to a UPI story released late Tuesday, officials from Foothill at one point indicated that they might call in their notes if Ruhe and Geissler resisted the restructuring plan that Nogales and Wechsler were suggesting.
Foothill, if it did call in its notes, probably could force the Washington-based news agency into bankruptcy, sources within the company said. The news agency has unpaid bills estimated at $17 million, of which $5 million to $7 million is owed to Foothill.
Reportedly negotiating through intermediaries, Ruhe and Nogales were said to have discussed how UPI would be restructured if current owners relinquished their 90% share in the nation’s No. 2 general news agency.
Nogales, Wechsler, Ruhe and Foothill officials were unavailable for comment.
Sources within UPI said the company’s three largest creditors--AT&T;, American Express and RCA--probably would be asked to forgive millions in unpaid bills that UPI owes them in exchange for acquiring partial ownership in the company.
It is unclear whether Foothill also would assume any partial ownership in UPI. Sources said Foothill currently has a great deal of influence on all major decisions involving the company.
AT&T; spokesman John Geoghegan said Tuesday that “our main interest is in getting the money UPI owes us,” though he declined to name that amount.
AT&T;’s potential long-term role in UPI also is cloudy because, Geoghegan said, the company is prohibited under its divestiture agreement with the Justice Department from entering the electronic-publishing business.
American Express declined to comment, and RCA said it was unable to discuss its future with UPI because too much remained unclear.
Whatever plan is worked out with Foothill and creditors over the next few days, UPI officials hope it will prove to be a temporary structure that will allow the news agency time to stabilize financially and then find a new major investor.
The wire service, established in 1907, has a news staff of about 900 working in 187 bureaus worldwide.
