PUBLISH AND PERISH

HOW TO FAIL IN BUSINESS WITHOUT REALLY FAILING.

Three weeks ago, Herschel Caldwell, the owner of a small newspaper company called Focus Journals Inc., filed for protection from his creditors under federal bankruptcy laws. The filing came as little surprise to, among others, Oliva de Castanos, a former editor of Caldwell's Denver Medical Journal, who had been trying to take the bounce out of her paychecks for nearly half a year before she quit.

Nor, when Sherry Anderson thought about it, was she particularly shocked when she heard of Caldwell's bankruptcy. Anderson lent Caldwell $3,000 in March 1992, but says she gave up any hope of collecting the debt eight months later--when another of Caldwell's companies, Focus Publication, also filed for bankruptcy protection.

For her part, Marge Lastick barely raised her eyebrows when she heard of Caldwell's filing. That's because she reconciled herself long ago to writing off the $38,000 Caldwell owed her when yet another of the publisher's companies, Network Publishing, declared bankruptcy in 1990.

"I made a couple attempts to track down his bank accounts," she recalls. "But I didn't want to spend any more time and money, so I sort of gave up." Adds John Egan, a Denver attorney who represented Sherry Anderson, "This guy just eludes everybody."

Caldwell's past may be catching up with him, though. A growing number of former investors and employees have formed a sort of loose-knit, anti-fan club. The members, who are mostly single women, meet occasionally and speak on the phone constantly. Their goal, they say, is simple: to keep the publisher out of business.

To the best of anyone's knowledge, Caldwell (who did not return repeated phone calls from Westword) has done nothing illegal. Nor is he a Michael Milken or a Meyer Blinder who takes investors for million-dollar rides.

Yet he is a fine example of someone who has mastered the bankruptcy game. Federal bankruptcy laws were designed to give debtors a new lease on their financial lives by lessening or even erasing debts so that they could begin anew. But critics charge--and Caldwell proves--that the laws are loose enough to afford plenty of room to maneuver.

His ride through the bankruptcy courts began back in the fall of 1987 when he answered a classified ad placed by Marge Lastick. Lastick, who currently lives in Longmont, had been running a monthly magazine called Network: The Magazine for Colorado Women. Although the publication, whose circulation had grown to 10,000, was never a financial success, Lastick says it came out every month between 1984 and 1987.

By 1987, however, Lastick was burned out and wanted to sell. She placed the ad. Caldwell responded, and in November 1987 he bought Network for $40,000. According to Lastick, Caldwell gave her a down payment of $2,000. It was the last money she ever saw from him.

"When the first payment came due," she recalls, "the check bounced. I attempted to contact him; my attorney attempted to contact him. We even got a judgment for the $38,000." But to this day Lastick has been unable to collect.

Meanwhile, at the plush new headquarters Caldwell had leased for the magazine--which he had renamed Western Woman--employees weren't enjoying much better luck. "He gave the impression of being well financed," recalls Karen Deger, who began working as editor of the magazine in January 1988. "The offices were very, very nice for a magazine just getting started. He had leather chairs, brand-new office furniture and an incredible view--I think we were above the tenth floor."

Deger says she became less impressed when her paychecks began bouncing. "I don't work for someone who can't pay me," she says. "And he didn't have any reason for why this was happening." Three months later Deger quit. Despite repeated attempts to collect, she has yet to see the $3,000 she says Caldwell owes her in back wages.

Only one issue of Western Woman made it onto the stands, and Caldwell's bills piled up. In April 1990 he filed for protection under Chapter 7 bankruptcy laws. The designation meant that Caldwell would be required to liquidate his assets to pay his debts.

The bills were substantial. Court documents show that Caldwell had accumulated $310,000 in debts--including $48,500 in unpaid taxes. He listed $122,500 in assets; however, $120,000 of that was his house, which creditors couldn't touch because of a mortgage. In August 1990 his case was discharged after the bankruptcy trustee determined that Caldwell had no assets with which to pay his $310,000 worth of creditors, who were left hanging.

Caldwell's next venture into publishing was called Focus News Review. According to a business plan written by Caldwell, the monthly was to be "a newspaper for men and women with diverse interests who share common attitudes toward family, changing lifestyles and the issues and events affecting all of us."

One person he raised money from to help finance the new publication was Sherry Anderson, whom he met at the Kennedy Golf Course driving range. According to Anderson, the two talked sporadically until 1991, when Caldwell told her he was starting a new paper. (According to the secretary of state's office, Caldwell's publishing company, Focus Publication, was incorporated in September 1991.)

After she turned down his offer to work as an advertising representative, Anderson says Caldwell asked her to invest in Focus News Review. She declined. But in the spring of 1992 he called again "in dire straits for money," and she wrote him a check for $3,000.

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