Did a Lawsuit Help Force the Chicago Reader Sale?

august 24, 2007  07:51 am
"It would be overstating it to say [it] forced the sale, but it certainly encouraged it," a former owner of the Chicago Reader tells Michael Miner. The suit in question was filed by co-founder and 19.1 percent stockholder Tom Rehwaldt against the remaining owners, and it charged that they had "taken steps to depress the value of the stock" in anticipation of a sale or merger for less than fair value, all with the purpose of pushing Rehwaldt out of the ownership picture, a charge one former owner called "completely bogus." This lawsuit, filed in December 2006, was the second that Rehwaldt filed against the other owners -- a 1988 suit came after he was fired from his position as operations director and alleged oppression, waste, and mismanagement. It was settled in 1991. "It was one of the things that made the future look bleak," a former owner says of the lawsuit. "At a time when we were supposed to be turning the company around, we'd be spending our money on legal fees. ... The sale was one of the things that would make it all go away and get [Rehwaldt] out of our lives forever."