PORTLAND – The company that used to own the Portland Press Herald and Maine Sunday Telegram is being sued by two of the newspaper’s former employees.
Lou Ureneck, a former executive editor at the paper, and Robert Rowell, a former vice president of operations, are suing Guy Gannett for more than $1 million. The men claim the company misrepresented the value of the paper in order to decrease money they earned in incentives.
The two men, who were part of a five-year incentive program that awarded bonuses to executives based on the newspaper’s value, said Guy Gannett’s appraisal of the paper was flawed in June 1997.
The men said the value of the paper was at least $180 million, and they should have received $500,000 each under the incentive program.
But Guy Gannett said the paper’s value was $106 million, and awarded Ureneck $156,000 and Rowell $195,000.
The lawsuit, filed Dec. 14 in U.S. District Court, asks the court to force Guy Gannett to pay the differences in the bonuses: Ureneck, $344,000 and Rowell, $305,000.
In addition, it claims the company violated laws governing worker compensation, and asks the company to pay penalties. That would bring the total payment to more than $1 million.
The lawsuit also points out that a little more than a year after the incentive plan concluded, Guy Gannett sold the newspaper to The Seattle Times for “a price in excess of $180 million.”
In addition, Ureneck and Rowell retained their own appraiser, who concluded that in June 1997 the newspaper was worth $182.8 million.
Jonathan Piper, the attorney for Guy Gannett, said the company stands by its original appraisal.
“We are confident in the appraisal,” Piper said. “We know that in the end a jury will conclude that (the two executives) are owed nothing.”
Charles Remmel, attorney for the two executives, said the company’s appraisal was blatantly flawed. For example, he said, it did not take into account the circulation of the Sunday Telegram, which was nearly double that of the Press Herald.
Until recently, Guy Gannett was the dominant media company in Maine, owning papers in Portland, Augusta and Waterville, as well as WGME-TV, Channel 13, in Portland. In the past two years, it sold all its holdings and now exists only as a liquidation trust.