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.

In return, Anderson says Caldwell gave her a promissory note, which guaranteed that he'd repay her double her investment--$6,000--in six months. "I knew this guy; he was a friend," she says today. "I didn't even question that he'd pay it back."

But as the months wore on and she didn't hear from Caldwell, Anderson says she began to feel uneasy. Her discomfort was confirmed when she called him a week before the money was to be repaid. The two agreed to meet for lunch--and a day later, Caldwell canceled. They haven't spoken since.

"He just blew me off, just totally blew me off," she says. "He didn't even care that he didn't have the money."

In November 1992 Caldwell filed Chapter 7 bankruptcy using the name Focus Publication. A month later the filing was tossed out of court because Caldwell insisted on representing himself in the proceedings. Although that is allowed in many instances, a non-attorney may not represent a corporation in bankruptcy court.

Today Anderson has yet to see her money even though she--like Lastick--received a court judgment against Caldwell. Her attempts to collect have run into empty bank accounts. The one time Anderson attempted to garnish Caldwell's bank account, for example, he "changed banks," recalls attorney Egan.

According to state records, five months before filing bankruptcy on Focus Publication, Caldwell started a new company. Focus Journals, Inc. was incorporated in June 1992.

By all accounts, the paper Caldwell began publishing next, the Denver Medical Journal, was the most successful of his attempts. According to his business plan, the Journal "was established to fill a niche--a void of in-depth information about health care and health care issues geared to the audience that most needs and desires that information: the rapidly aging American." The first issue came out in the summer of 1992 and, although one or two were missed, it continued to come out through the beginning of 1994. Caldwell claimed a readership of 40,000.

That didn't mean that everything was going swimmingly in the company's South Galena Street offices, however. In fact, Caldwell was going through staffers like old newspapers. The reason was familiar.

Leona Birsa says she was hired as an office manager and writer for the Journal in June 1992. A few months later, she says, her paychecks began bouncing. She quit in January 1993.

Oliva de Castanos was hired as the Journal's executive editor that same month. "It became obvious pretty quick that the checks would bounce," she recalls. "Everyone in the office didn't anticipate payday; we dreaded it."

Several employees say they fought Caldwell on nearly every paycheck from last summer on. In one attempt to get their money, de Castanos and another employee, Jayce Keane, cashed their checks at Safeway and King Soopers. They bounced, and now both women say their credit at the stores is ruined.

De Castanos quit in October 1993. Two months ago a Denver County court awarded her and Keane a total of $2,500 in back wages. Like many others, however, they have yet to see their money.

On March 16 Caldwell filed for the third time for protection from his creditors under Chapter 7 bankruptcy. He lists $3,500 in assets and $68,000 in debts, including one familiar creditor: the Internal Revenue Service, to which Caldwell owes more than $26,000 in payroll taxes. (Because the IRS declines to disclose documents on individual cases, it is unclear whether the agency ever collected the money Caldwell owed from his 1990 bankruptcy.)

According to the court documents, Caldwell also owes $1,800 to the Journal's last editor, Sarah Ellis--who says it is time for Caldwell to close up shop for good. "When your priority is not to pay the government or your employees," she says, "it's time for you to get out of business."

Those who worked with him up through his latest business flop say Caldwell already is planning his next venture, a direct-advertising business called Flair Mail. According to his business plan, "Flair Mail for Women is a direct response program designed for women 35+ who live in Colorado and earn $35,000 and up."

Despite Caldwell's success at eluding his debts for the past several years through the federal bankruptcy court, he may be running out of luck--although through no doing of the bankruptcy court. The numerous people he has burned have begun getting in touch with each other, commiserating and swapping war stories over the phone.

Most damaging for any of Caldwell's future endeavors is that this group has made every effort to contact those who have--or might--go into business with the erstwhile publisher. "Little by little we came to realize that he was not dealing with anyone fairly," says Keane. "Now we just want to stop him from hurting anyone else.


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