Guild official: Two Inquirer co-owners scuttled settlement deal

Inquirer co-owners Lewis Katz and H.F. "Gerry" Lenfest backed away from a proposal to settle their dispute with co-owner George E. Norcross III over control of the newspaper's parent company, a top union official asserted Wednesday.

Katz and Lenfest said Bill Ross, executive director of the Newspaper Guild, had his facts wrong.

The war of words erupted as the very public battle among the owners of Interstate General Media was poised to enter its second month. For the first time, it wasn't the partners slinging arrows but a leader of the union both sides had been trying to win over.

The Guild, the company's largest employee union, remains neutral, but Ross had offered to broker a settlement.

In a letter to the billionaire and philanthropist he sent to Guild members by e-mail, Ross said Lenfest "misled me, lied to me and attempted to cast doubt on my credibility."

"Your facts are incorrect and your e-mail belligerent," Lenfest said in a statement responding to Ross. "As for lying, I will at any time stake my reputation for honesty against your own. I have great respect for members of the Guild but, unfortunately, not for you."

A lawsuit brought by Katz and Lenfest against Norcross and the other IGM partners to overturn the firing of Inquirer Editor William K. Marimow is scheduled for a hearing Wednesday before Philadelphia Common Pleas Court Judge Patricia A. McInerney.

Ross told Guild members he had discussed a settlement proposal with all sides last week that would involve Katz and Norcross each appointing two members to a new board of directors, with Lenfest appointing a tie-breaking fifth member.

A central point of conflict in the current corporate structure is that Katz and Norcross, as the two co-owners on the company's management committee, each has effective veto power over major decisions.

Under the proposed deal, that board would hire a new publisher for the company, who in turn would bring on a new editor for The Inquirer, Ross said. He said Lenfest assured him he and Katz would sell their shares in the company once assured it would be in good hands.

Ross wrote that he and Lenfest discussed the proposed solution during an Oct. 30 meeting, and that he then telephoned Katz with the idea and said he would convey it to Norcross.

"Once I did so, and confirmed that the majority owners saw this overture as a positive basis for settlement discussion, you both changed your minds," Ross said. "You told me you were emboldened by Judge McInerney's decision to hear the case in Philadelphia and you backed off your settlement talks and denied ever indicating you would sell your shares and also referred to a scenario in which Marimow did not return to The Inquirer as a deal breaker. You both . . . acted as though I had concocted this idea out of thin air."

The e-mail offered the first glimpse of behind-the-scenes negotiations in the dispute.

The union said Ross' statement was not authorized by its executive board, composed of officers elected by the members. Ross runs the union's day-to-day affairs and answers to the board.

Lenfest said he never indicated to Ross he would sell his interest in IGM. "Why would I continue as a board member if I didn't have ownership?" he said in an interview.

He also denied saying he was "emboldened" by the judge's decision. To his recollection, Lenfest told Ross he thought Marimow should be reinstated until April, when the editor's original contract was set to expire; after that, the publisher would decide on the editorship.

Lenfest said he had discussed with Norcross and Katz the idea of a new board with a tiebreaker element several times in recent months as tension built between the two men. "Norcross doesn't want to give up control," Lenfest said in the interview.

Katz, in an interview, called Ross' statement "a significant lapse of judgment riddled with inaccuracies" and said the union official was "really carrying George Norcross' water."

Katz said he did not discuss a settlement with Ross, but was open to his acting as mediator provided he got a proposal for a solution from the Norcross side.

Guild president Howard Gensler said the unauthorized e-mail was a serious mistake in judgment by Ross that would aid feuding owners "who would like nothing better than to divide and weaken our membership."

Gensler said the executive board would discuss the matter with Ross on Thursday. "Unlike the owners and the company, we prefer not to leak our private business all over town," he said.

Dan Fee, a spokesman for Norcross and three other owners, said they were open to settlement talks.

Each side offered to buy the other out last week.

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@tomfitzgerald