The chain that owns SF Weekly, which last year had revenue of at least $159 million and more than $11 million in profit, argued in court June 5 that it's having trouble raising money for an appeal bond to cover the $15.6 million judgment the Guardian won in its predatory pricing lawsuit.
SF Weekly attorney Rod Kerr asked Judge Marla Miller June 5 to stay the judgment until 10 days after she rules on post-trial motions. That could have delayed the judgment until July 28.
Village Voice Media, which owns the Weekly, needs to post a bond for the full amount of the verdict plus interest now accruing at more than $4,000 a day if the chain wants to avoid paying the Guardian during the appeals process.
Kerr argued that turmoil in the financial markets and the need for VVM to get approval from its lenders is making it difficult to secure the bond. "Without the post-trial decisions, they're not willing to release the collateral," he said in court.
Kerr said he believes there is a likelihood the judgment amount will be substantially lowered during post-trial rulings, something the company has represented to its lenders.
Guardian attorney Ralph Alldredge, speaking to the court by telephone while his co-counsels Richard Hill and Craig Moody were present, reiterated a previous offer to stay enforcement until June 18, which is 30 days after the judgment was entered following the March jury verdict.
But Alldredge said the statements and briefs by the defendants raise serious concerns about whether they're prepared to cover the full judgment, so the Guardian needs to be able to take steps to ensure that assets are being identified and secured to satisfy the judgment.
"They anticipate post-trial motions will result in a reduction of the verdict, so apparently their lenders have been told that," Alldredge said, adding, "The lenders need to be told the judgment is likely to be the final amount."
Judge Miller agreed with the Guardian position, granting the stay only until June 18, but allowing the defendants to return to court to ask for more time if they can provide evidence showing how it will result in a bond being issued.
"I am concerned there is a risk that the bond may never be issued," Miller said.
A San Francisco jury found that SF Weekly has been engaged in illegal predatory pricing going back to the mid-1990s, selling advertising below the costs needed to support the paper in an effort to drive the Guardian out of business.
Kerr also sought to delay enforcement of an injunction Miller issued that bars further below-cost pricing by SF Weekly, but that portion of the motion was denied.
Both sides are due in court July 8 at 9 a.m. to argue post-trial motions, including one by the defendants to throw out the verdict and order a new trial. (Steven T. Jones)
For more details and key documents, go to sfbg.com/lawsuit