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Dumped and Unpaid at the Georgia Straight

Staffers say they toiled for no wages to keep the paper alive. Now they’re fired, owed money, and out in the cold.

Zak Vescera 19 Oct 2022TheTyee.ca

Zak Vescera is The Tyee’s labour reporter. This reporting beat is made possible by the Local Journalism Initiative.

The crew at the Georgia Straight wrote until the bitter end, filing stories and chronicling Vancouver’s culture after the paycheques stopped flowing and the printer stopped running.

Martin Dunphy’s 32 years at the iconic alt-weekly ended with a 17-minute Zoom call, where he and the dozen-odd staff were unceremoniously fired as a new publisher bought the paper from its bankrupt owners.

Its assets had been bought by Overstory Media Group, co-founded by a multimillionaire. The Victoria-based firm has a track record of investing in local news and leadership, and framed the buy as a way to revive the struggling Straight.

Left behind are Dunphy and his peers, who are owed thousands of dollars each in severance, vacation and unpaid wages with no clear way to recoup the cash.

“When I started at the paper, it was a few pages and we didn’t know if we’d get paid,” said Dunphy, whose first job at the Straight was selling copies of the paper on the cobblestone streets of Gastown for beer money in 1973. “And it ended the same way.”

The Straight’s previous owner, Media Central Corporation Inc., is bankrupt after a two-year blitz that saw it acquire a few of Canada’s largest alt-weekly publications, hemorrhaging cash along the way. Overstory Media Group bought the paper’s assets — intellectual property, website and content — but not its liabilities, which includes any pay owed to staff.

Former executives at Media Central have not responded to requests for comment.

Farhan Mohamed, the CEO of Overstory, has said the previous owners are responsible for not paying their employees and that his company never terminated anyone. Overstory specifically stipulated in its purchase of the Straight that Media Central — now bankrupt — was responsible for paying severance.

Dunphy says he learned that Overstory had bought the Straight when he saw an interview with Mohamed in a local business publication.

“One side says there’s no money. The other side says they’re not responsible,” Dunphy said.

All counted up, Dunphy estimates the terminated staff at the Straight collectively spent around 300 years working at the paper, often keeping it afloat.

The Straight changed over the years, but many members of its core team stuck with the paper. It was irreverent, feisty, colourful, unafraid of being controversial, and often willing to do and say what others would only hint at.

The paper’s former staff now find themselves trying to navigate a labyrinth of bankruptcy and labour law to get back the money they are owed while trying to balance their own mortgages and rents.

“Our plan was to keep it running until somebody bought it and hopefully things would turn around,” said Steve Newton, who published his first words in the Straight 40 years ago. “And then they did, and it all went down the toilet.”

‘We have been trying to keep it alive’

On Sept. 27, the Straight’s staff were called into a meeting that elicited more questions than answers.

Kirk MacDonald, the former president of the Straight’s corporate entity, told writers the company had been liquidated as a result of the bankruptcy proceedings of its indebted owner.

“What this means to you is all current employee agreements have been terminated,” MacDonald told staff. “The buyer will reach out to employees as they wish about future employment.”

Editor Charlie Smith asked if that meant they should stop posting stories to the Straight’s website. “We have been trying to keep it alive,” he explained. Later, Newton cracked a joke.

“In the meantime, I’ll just stop writing this Stewart Copeland story, huh?” he said.

The sale came after months of uncertainty at the Straight. When the previous owner Media Central Corporation Inc. declared bankruptcy in late March, it faced down a grim balance sheet, an investor rebellion and a disastrous loss in court.

Since July, Dunphy said, paycheques had stopped coming regularly. But a small group of employees stuck around, loath to let the Straight die quietly.

“Most of us had a deep sense of loyalty to the paper, even though the owners had changed and we had been through so much,” Dunphy said. “They just loved the Georgia Straight and what it had been, and what it could be again.”

Newton had written for the Straight ever since he stopped by its offices on the way to a Black Sabbath concert in 1982. He got a permanent job in 1984, covering rock, roll and the city he loved, rubbing shoulders with his musical idols.

“Before you knew it, I was doing cover stories on Ozzy Osbourne, Iron Maiden and all the bands I was reviewing back in ’82,” he said. The most important story he wrote might have been a classified ad in 1993, where he asked Straight readers if anyone would like to accompany him to concerts. A woman responded. Four years later, they were married.

“It was my life for 40 years,” Newton said. “I had been at it for so long. I just wasn’t ready to throw in the towel.” He said Smith, who declined to be interviewed for this story, believed that keeping the website alive would make it more appealing to a prospective buyer.

“We felt that if the website was still up, it would be easier to sell it, not realizing that we would get dumped anyway,” Newton said.

At first, he said the firing shocked him. That turned to anger when he realized the predicament he was in. Under B.C. law, Newton would be entitled to a minimum of eight weeks of severance plus unpaid wages. But since the former employer is bankrupt, he would need to join a line of other creditors to get the money he is owed.

Normally, a new owner assumes those responsibilities when it purchases a company. But Newton was terminated before Overstory bought the Straight. Since Overstory only purchased the Straight’s assets, they don’t assume responsibility for liabilities, like its unpaid debts.

“People keep telling me ‘dude, they owe you something,’” Newton said. “And I’m like ‘Yeah, I know.’”

Lia Moody, a Vancouver labour lawyer, says it’s a “mind blowing” problem that is all too familiar.

“In a case where termination happens by the bankrupt company and there’s no indication employment happened with the new company, the employee is an unsecured creditor,” Moody said.

She says employees usually have two options, neither of them good. They can join the queue of creditors trying to get money from the bankrupt firm, or sign onto a federal program that provides a “modest” sum in lieu of severance pay.

Neither one, she says, is likely to recoup the full amount owed. Documents filed in court show that when it declared bankruptcy Media Central reported liabilities of more than $2.2 million. Its stocks and securities were evaluated at a paltry $350. That means there’s a long line of both unsecured and secured creditors looking to get their due. The federal program, meanwhile, only allows employees to recoup severance pay, not unpaid wages.

“It’s terrifying to me that employees can be left basically without a life raft in a decision over which they have no control,” Moody said.

Dunphy said he is first attempting to file a complaint with B.C.’s Employment Standards Branch. He also said it was a bitter end for his time at the paper.

Dunphy, who started out as a copy editor, proofreader and freelance writer with the paper, said he remembers when the Straight had the money for big investigations and special issues that were more than 200 pages. Tuesday was “hell day” — the day the publication’s staff might work 14 hours to slap the paper together for its Thursday run.

He weathered hard years, too, watching the paper shrink as the internet ate into their advertising revenue. The things that drew him to the job faded, but they never disappeared.

“I find it kind of unconscionable what happened to us,” Dunphy said.

Return on investment

In some ways, the Straight’s recent problems began 23 years and a continent away, when Pantheon Airport Systems Inc. was registered as a corporation in the State of Delaware.

Nearly two decades later, it relocated to Ontario and changed its name to Media Central Corporation Inc., the company that would buy the Georgia Straight.

Media Central described itself as “an alternative media company situated to acquire and develop high-quality publishing assets.” It finished buying Vancouver Free Press — the legal entity of the Georgia Straight — for $1.25 million in February 2020, days before the COVID-19 pandemic shuttered whole sections of the Canadian economy and sent advertising revenue tumbling.

Layoffs ensued. Newton was fired for six months. And the new owners began talking about ending the paper’s historic focus on local theatre, galleries, exhibitions and art in a bid to drive up revenues.

In a June 2020 letter to shareholders, former Media Central CEO Brian Kalish said the company would pivot to “a focus on health, education, finance and esports.”

Some staff disagreed with that direction, including Laura Moore, the Straight’s director of arts and sponsorship. In court documents, Moore described herself as the Straight’s top revenue earner, someone who had fostered deep connections with the city’s arts establishments and turned them into a steady source of income for the Straight.

In late March 2020, Moore was fired. She began a lawsuit against the Straight alleging wrongful dismissal. Many former employees testified about the change in priorities at the office.

Dunphy and Newton said Media Central’s pivot didn’t stick. Even in its last days, Dunphy noted, the Straight continued to cover the arts. Newton said he and former Straight editor Charlie Smith made a point of ensuring arts stayed in the paper.

“Charlie Smith and I had been working like dogs to cover the arts in the Straight,” Newton said. Dunphy said that “dumb memo” led to more chaos than change. But the incident tarnished the paper’s reputation.

Media Central continued to hemorrhage money. In 2020, the company reported spending more than $5.2 million on sales, administration and other expenses across its various subsidiaries. It made just over $1.9 million.

In March 2022, Media Central’s shareholders bit the bullet. A group led by a member of a North Vancouver-based investment firm moved to enforce more than $1 million in security against the company.

In May, Moore won her suit against the Straight’s corporate entity. She was awarded more than $170,000, plus costs, and later moved to garnish part of those winnings after it was clear the parent company was bankrupt.

MacDonald, the last president of the Straight’s corporate entity, did not respond to a request for comment sent to a personal email he listed in court records.

On his final call with the Straight’s staff, he told them to contact Wei Lin, the primary debtholder of Media Central’s assets and a co-founder of Lightheart Management Partners, a Vancouver investment firm. When The Tyee phoned Lin, he immediately said he had no comment on the matter and hung up.

“They destroyed the company,” said Mohamed, Overstory’s CEO. “They destroyed the brand. They went bankrupt. So we’re coming in and we’re saying, we don’t want to make any of these same mistakes.”

Meet the new owners

The Straight was once again for sale.

Enter Overstory Media Group, a Victoria-based company founded by Mohamed and Andrew Wilkinson, a journalism school dropout who went on to make millions in the tech industry.

He’s invested some of that money in community news. Overstory made headlines last year when it announced a goal to create 50 new outlets and hire 250 journalists by 2023. It lists 15 on its website, including flagship operation Capital Daily and the Straight.

Mohamed said they wanted to buy the paper because it was a “household name” in Vancouver that had been tarnished by Media Central’s management. They reached out in the spring of 2022 and completed the purchase of the assets on Sept. 22, five days before the paper’s remaining staff were terminated.

“I know that others wanted to strip it down, rip it apart and not honour what was built,” said Mohamed, who would not reveal what Overstory had paid. “And we said no, that’s the opposite of what we are going to do. We are going to respect it. We are going to cherish and remember and also figure out how we honour this.”

Overstory’s acquisition of the Straight was celebrated at first. Smith, the Straight’s former editor, wrote on Substack that Overstory was likely the best for-profit company to take over the Straight.

“That said, I certainly wish that Overstory Media Group hires my former colleagues. They’re very talented. I also think that had any of those other companies bought the assets of Vancouver Free Press, we still would have been fired and forced to make a case for being rehired,” Smith wrote.

Mohamed told local media that his company was going to revive the paper. And they hired Mike Usinger, a well-known writer with a long history of working for the Straight.

Some of that celebration felt hollow to the terminated staff, who feel Overstory’s stated goal of honouring the publication has not extended to the people who kept its lights on in dark days.

“A lot of the readers can’t believe it, really,” Newton said. “They’re just as shocked as I am that someone would try to pull this.”

Mohamed said Media Central was to blame for the employees’ grievances.

During an interview last Friday, where he was joined by a representative from a local public relations firm, Mohamed said he didn’t know if Media Central’s termination of the Georgia Straight’s employees was a condition of the sale. Later, Overstory’s representatives said such termination of contracts was a “standard practice with asset sales.”

“Our plan is now to hire back as many employees as we can who are aligned with our vision for the future of the Straight, while also doing so in a sustainable way. We’ve already done this with Mike Usinger, and several others are still on the table. It’s a slow process, as the Straight’s circumstances are complex and in need of serious repair,” Overstory said in a statement.

More than once, Mohamed lamented how some media workers have responded to news of the acquisitions and the terminations online, saying Overstory should be celebrated for investing in local news.

He added that he tried to hire Smith but that Smith declined (Smith would not confirm or deny that).

“Everything happened very quickly. And so we didn’t want to put ourselves in a position where we were taking on all these contracts,” Mohamed said.

“So rather than taking it on that way, we said you guys (Media Central) made your bed, slept in it, whatever. You guys made your mess. We don’t want to take on any of that mess that you made and the decisions you have made… we can’t do that as an organization, and quite honestly, I don’t think any company that would have acquired it would have done that.”

Asked what he would say to the fired staff, Mohamed paused.

“You know, it’s tough.” He stopped again.

“I’ve been so tired of the way the industry has been run,” he said. “I’ve been so tired of seeing ownership like Media Central. There are so many like this across the country. They’re all just focused on one thing. They’re focused on making as much money as they can. To former staff: reach out and talk to us.”

Dunphy remembers an old editor telling him: “We have a reputation to live up to, and a reputation to live down to.”

“If I have any regrets,” Dunphy said, “It’s that I just didn’t write enough.”  [Tyee]

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