CHARLESTON – A federal judge upheld a $3.8 million arbitration ruling against The Charleston Gazette-Mail.
U.S. District Judge Thomas Johnston granted the petitioner’s petition to confirm the arbitrator’s award and denied the respondent’s motion to vacate the arbitrator’s award on Jan. 19.
The newspaper filed a motion to vacate the arbitrator’s award on Sept. 21 in the U.S. District Court for the Southern District of West Virginia.
MediaNews Group Inc.—the former owner of the Charleston Daily Mail—said it did not consent to the combination of Charleston’s two daily newspapers two years ago and that it is entitled to back-payments, plus payments of an annual management fee until the year 2024.
The company also claims www.dailymail.com was sold without consent.
Earlier this month, Edward D. McDevitt, the arbitrator, ruled in MediaNews’ favor.
In the newspaper’s Sept. 21 response, the attorneys claim that the domain name sale and the combination of two newspapers were a financial necessity — that default on its loan with United Bank was at hand and that bankruptcy would have been necessary if two newspapers had continued operating into the next year.
The arbitration order says the Daily Gazette Company and the Daily Gazette Holding Company LLC, the companies that run Charleston Newspapers and the Charleston Gazette-Mail, must pay MediaNews Group Inc. and Charleston Publishing Company, the former owners of the former Charleston Daily Mail, $3,795,000 plus post-judgment interest for three primary claims the former publishers of the Daily Mail had made.
Although the Daily Mail’s and Gazette’s joint business operations were known as “Charleston Newspapers,” the Daily Gazette Company owned the Gazette and MediaNews owned the Daily Mail.
Both companies had 50 percent stakes in Charleston Newspapers until 2004 when MediaNews sold out to the Daily Gazette Company for a reported $55 million.
U.S. District Court for the Southern District of West Virginia case number 2:17-cv-03921