Los Angeles Times sues O.C. Register alleging breach of contract
The Los Angeles Times filed a lawsuit on Tuesday against the Orange County Register, accusing the embattled newspaper of breach of contract and failure to pay more than $2 million in delivery fees.
The Times said the Register has consistently been late on payments for distributing its papers ever since falling behind in April 2013. The Times informed the Register last month that it was in default on the contract and had 30 days to pay.
Instead of paying, the Register switched to alternative vendors earlier this month, breaking its agreement with The Times, according to the lawsuit filed in Los Angeles Superior Court. The Times said it terminated the agreement after the Register violated The Times’ “exclusive right to deliver” the paper.
The Register now owes the Times at least $2.464 million, the lawsuit said. The Times said its total damages may exceed $4 million.
“The Register has repeatedly broken its promises and breached its agreements,” the lawsuit said. “By contrast, The Times performed as it said it would.”
Officials at the Register have not responded to a request for comment.
The lawsuit is yet another complication for the Register, which along with its parent company Freedom Communications has suffered a string of financial setbacks.
On Tuesday the Register said it had replaced publisher Aaron Kushner with Richard Mirman, a former casino executive. Kushner, owner of Freedom Communications, will stay on as Freedom’s chief executive. Mirman takes over as the Register’s CEO and interim publisher.
The Times, which has served as the Register’s distributor since 2009, said it had been trying to coax the Register to pay up for months.
The two companies agreed on a payment plan in May, the lawsuit said. However, the Register made only one payment under the agreement.
In February, Kushner offered to pay half the money owed on the condition that The Times give his company a favorable rate for delivering the soon-to-be-launched Los Angeles Register, which debuted in April and was shut down last month, the lawsuit said.
In July, after missing a $600,000 payment, Kushner emailed former Times publisher Eddy Hartenstein to explain the delay. “We’re digesting a major staff restructuring with more severance and final vacation payouts than originally anticipated,” Kushner said, adding that the payouts affected the company’s “immediate cash.”
In an email last week, Kushner said The Times “refused to guarantee uninterrupted delivery for our paper.”
“We were left with no choice but to transition to a new delivery service,” he told The Times.
The switch to new distributors on Oct. 4 caused delivery problems that left many subscribers paperless for days. Some Register subscribers have complained on social media that they have yet to receive their paper.
Follow Shan Li on Twitter @ShanLi