Newspaper Industry News

Former Daily Mail owners sue over sale of domain name


Charleston Gazette-Mail

CHARLESTON, W.Va. — A lawsuit filed by the former owners of the Charleston Daily Mail against United Bank attempts to recoup about $1 million the company alleges the bank received from the sale of to the London newspaper of the same name.

The complaint filed late last month in Wood County Circuit Court by MediaNews Group Inc. and Charleston Publishing Co. claims the bank tortiously interfered with the Daily Gazette Co. by inducing the sale of the domain name.

United Bank became Daily Gazette’s primary lender in 2006. The Daily Gazette Co. which publishes this newspaper, previously published both the Charleston Daily Mail and the Charleston Gazette. In 2015, when the newspapers combined, upon liquidation, the complaint states, the Daily Gazette was to distribute, among other things, the websites of the Charleston Daily Mail to Charleston Publishing Co.

Charleston Publishing Co. registered in 2004, according to the lawsuit.

United Bank allegedly drafted letters that represented that both the Department of Justice and MediaNews Group had consented to the sale of the domain name when, in fact, the news group had not.

“United Bank’s consent to the sale of the domain name was conditioned on the Bank being paid $1 million,” the complaint states. “In other words, the transaction was a quid pro quo: United Bank released its security interest in the domain name, which it had obtained in connection with its loan to Daily Gazette, in exchange for a share of the proceeds of the sale. Without United Bank’s consent, the sale could not have taken place.”

The lawsuit alleges the bank took advantage of knowing the Daily Gazette wanted its loan refinanced and that the likelihood of that happening would be more favorable if the Daily Gazette made a $1 million payment to the bank, regardless of whether it obtained MediaNews Group’s consent.

“United Bank took advantage of this situation by making the refinancing contingent on Daily Gazette’s completion of the sale and payment of the $1 million to United Bank,” the complaint states.

The plaintiffs are being represented by Charleston lawyers Michael Carey and David Pogue.

Richard Neely, general counsel for the Daily Gazette Co., said: “ In 2004, the owners of the Charleston Daily Mail sold all their economic interest in the Charleston Daily Mail to the Daily Gazette Co. The Daily Gazette Company’s lender in 2013 was United Bank. In accordance with the loan agreement, United Bank allowed the Daily Gazette Co. to sell certain pledged collateral, the URL rights to to the London Daily Mail for $1.5 million. Two-thirds of the proceeds was used to reduce Daily Gazette Co.’s debt and one-third was put back into the newsrooms, purchasing new camera equipment, a content management system and a digital solution software package. We don’t see any basis for Digital First Media/Media News Group’s lawsuit against United Bank.”

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