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Serving Northern St. Louis County, Minnesota

Arguments filed in competitors’ lawsuit against Timberjay

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REGIONAL— Attorneys for both sides in the ongoing lawsuit filed by Gary and Edna Albertson against Timberjay majority owners Marshall Helmberger and Jodi Summit have filed legal briefs with the Minnesota Court of Appeals, laying out their arguments on whether the case should be sent back to the district court in Virginia for further proceedings.

Sixth District Judge James Florey, who was recently appointed to the Court of Appeals by Gov. Mark Dayton, dismissed the Albertsons’ case with prejudice in December, after finding that the Timberjay’s majority owners had complied with both state law and the corporation’s bylaws in their dealings with the Albertsons, who purchased a minority interest in the company from a previous shareholder in 1997. The Timberjay never received any financial benefit from the transaction, which was a private purchase between the Albertsons and the former shareholder, made without any prior consultation with the newspaper’s majority owners.

The Albertsons, who own both the Cook News Herald and the Tower News, are direct competitors with the Timberjay and have been since the newspaper’s inception in 1989. The Albertsons complain that they have not been paid dividends nor had a role in management of the Timberjay, arguing that such a situation frustrates their “reasonable expectations” and gives them the right to ask a court to extricate them from their questionable investment.

Judge Florey rejected those arguments in granting summary judgment to the Timberjay’s majority owners and dismissing the Albertsons’ claim. Under state law, a court only has authority to intervene in the actions of a corporation in cases where some degree of wrongdoing or unfairness has occurred.

In their appeal, the Albertsons’ attorney, John Colosimo, argues that Florey’s decision was premature, since summary judgment can only be made when there are no genuine disputes of material facts upon which the case could hinge, although he failed to identify any facts under dispute. Colosimo indicated Florey should have undertaken more fact-finding to determine what expectations the Albertsons had for their investment. But courts in Minnesota have consistently determined that such expectations must be agreed upon by all stockholders, either in writing or verbally, and can’t simply be imposed on other shareholders by a minority shareholder such as the Albertsons. The parties, in this case, never agreed on what role, if any, the Albertsons would play in the operations of the Timberjay, or whether dividends would be distributed. The Timberjay’s board of directors has, since the newspaper’s inception, reinvested profits into the business to improve quality and build a credible news organization. As direct competitors, the Albertsons are ethically barred from serving on the Timberjay’s board of directors.

The Albertsons complain that by dismissing the case when he did, that Judge Florey had “denied them their day in court.” The case did, however, involve several months of discovery during which the Timberjay’s majority owners provided the Albertsons with several hundred pages of documents and answered questions under deposition. In their arguments to the district court, the Albertsons presented none of the documents obtained through discovery to the court to support their claims. The only evidence submitted by the Albertsons was a two-page affidavit from Gary Albertson that included false material statements under oath. In the sworn document prepared by Colosimo, Albertson claimed he had never received the corporate tax returns, which include all of the financial documents that corporations are legally required to provide to shareholders, until he and his wife Edna filed their lawsuit. But that material statement was proven false to the court, as numerous letters and answers to interrogatories served on the Albertsons early in the case attested. Judge Florey, in his Dec. 28 ruling, noted the contradiction between Albertson’s sworn statement and the documents submitted to the record by the Timberjay’s majority owners.

The Timberjay’s attorney, Tom Torgerson, in his brief to the Court of Appeals, cites case law that argues that the Albertsons forfeited their right to court intervention by submitting false material statements under oath to the district court, which is the legal definition of perjury.

In addition, Torgerson cites a total of 14 additional misrepresentations or unsupported claims by the Albertsons and attorney Colosimo in their brief to the appellate court, in which they repeatedly mischaracterized documents that the Timberjay’s majority owners had submitted to the district court as evidence in the case. All of those documents had been made available to the Albertsons and Colosimo early on in the case, but they had not cited any of them when they presented their case to Judge Florey.

Now, before the Court of Appeals, the Albertsons and Colosimo are mischaracterizing the content of those documents, according to Torgerson. In several cases, the Albertsons’ claims run directly opposite of the plain language in the cited documents.

The Albertsons’ appellate brief also suggests that the Albertsons expected to be employed in some capacity by the Timberjay, and falsely claims that the shareholder whose stock they purchased in 1997, had been employed by the company up until that time. In fact, the shareholder, Madonna Ohse, had not worked for the Timberjay for a number of years by the time she sold her stock to the Albertsons. The Albertsons, as is widely known in the region, work full-time producing their own competing newspapers and have continued in that capacity ever since purchasing stock in the Timberjay. At no time, have the Albertsons ever sought employment from the Timberjay.

Torgerson notes in his appellate brief that, by rule, parties in an appeal must state facts “fairly, with complete candor,” as well as include a reference in the record to support their statements. The “facts” as presented by the Albertsons and Colosimo “do not comply with those obligations,” he concluded.

As appellants, the Albertsons will have the opportunity to submit a reply brief ahead of oral arguments in the case. Oral arguments are expected by mid-summer with a decision in the case expected by the fall.

Were the Albertsons to prevail, the matter would most likely be remanded to the district court for further proceedings on any remaining disputed points in the case. Assuming the court affirms Judge Florey’s decision, the case would likely be at an end. Florey dismissed the case with prejudice, which means the Albertsons cannot bring it back up again. While the Albertsons could still appeal to the Supreme Court, the high court would be unlikely to accept the case. Only about ten percent of the cases referred to the Supreme Court are ultimately heard by the court and are selected based on their broader importance and value as court precedent.