Inquirer co-owners file suit over editor's firing

Two co-owners of The Inquirer's parent company filed a lawsuit Thursday accusing the newspaper's publisher and the other owners of violating their operating agreement by firing editor William K. Marimow this week.

The complaint, filed in Philadelphia Common Pleas Court by H.F. "Gerry" Lenfest and Lewis Katz, asks a judge to immediately reinstate Marimow, remove publisher Robert J. Hall, and hold a hearing on the dispute.

The lawsuit is the latest salvo in a war among the wealthy and influential businessmen who purchased The Inquirer, the Philadelphia Daily News, and Philly.com in April 2012 and operate them through the company Interstate General Media.

That feud spilled into the open Monday when Hall fired Marimow, an editor with a long history in the region, citing "philosophical differences" over the direction of the news organization. Hall said that he had the power to dismiss the editor and that all the owners but Katz approved of the move.

The lawsuit contends that Hall acted without authority and "in direct violation of the explicit provisions of the agreement" among the principal owners. It also argues that Hall was not on that date an employee of the company. According to the filing, Hall was a part-time publisher whose contract had expired Aug. 31 and had not been renewed by the board of directors.

Hall did not respond to requests for comment.

Dan Fee, a spokesman for the other four owners, who hold 58 percent of the company, said Marimow's shortcomings had been "well documented in materials that have already been widely disseminated and reported in the media."

The lawsuit seeks a preliminary injunction, but it was unclear how quickly a judge might hear it. Lawyers for both sides could not be reached for comment.

The complaint and retort are the most public slings in a feud that pits Katz against another owner, South Jersey businessman and political power broker George E. Norcross III, and that spread beyond the company this week.

By Thursday, petitions supporting Marimow and decrying his firing had drawn hundreds of signatures.

At least 15 Inquirer newsroom staffers were anonymously mailed copies this week of a seven-page memo that Hall used to justify the firing. The memo criticized some staffers by name and said there had been a lack of cooperation with Philly.com.

In an e-mail Thursday, the union that represents reporters, photographers, designers, and other staffers at the newspapers and website urged members not to attack one another "for decisions being made by top management and highly-paid consultants."

According to Fee, Marimow enlisted Katz to help stymie changes ordered by the publisher.

Fee also said Katz "has a well-documented history of attempting to interfere in the editorial and journalistic operations of the newspapers, something each of the owners publicly and in writing pledged not to do. This lawsuit is just the latest example."

Documents filed with the suit show that Katz and Norcross each contributed $16 million of the $61 million used to buy and reshape the company. Each also holds a 26 percent interest, and together they make up the committee that is to approve major business decisions.

That gives each an effective veto at a time they have been at odds over the company's digital strategy and whether Marimow was moving fast enough in changing the operation.

Like most papers, The Inquirer, the state's largest newspaper and among the top 20 nationally, has struggled to hold onto readers and advertisers in the digital age. It also has endured four ownership changes in a decade.

"The fact is, the business and the industry are already having difficulty," said Charles Elson, who runs the John L. Weinberg Center for Corporate Governance at the University of Delaware. "A dispute in a partnership in a business in difficulty is quite troubling, which is why, before making a major move like this, it is advisable to have the assent of all parties."

The Philadelphia law firm Sprague & Sprague is representing Katz, whose fortune began in the parking-lot business, and Lenfest, the cable TV pioneer and philanthropist, who owns 16 percent of IGM.

The opposing owners - who, beside Norcross, include Krishna P. Singh II, Joseph Buckelew, and William P. Hankowsky - have also retained powerhouse legal talent, including Michael Chertoff, former U.S. secretary of homeland security.

Marimow, 66, a Haverford native and former investigative reporter who won Pulitzer Prizes at The Inquirer in 1978 and 1985, was rehired as editor after the owners bought the company out of bankruptcy last year. He previously led the paper from 2006 to 2010.

The lawsuit says Marimow's hiring "was meant to bolster the newspaper's staff after it had been drastically shaken by cost-cutting measures, a bankruptcy filing in 2009, and constant changes in management."

According to the complaint, hours after Marimow agreed to leave a teaching position at Arizona State University and return as editor, Hall telephoned him with "scathingly critical" comments and vowed to keep an eye on him. Marimow had been Hall's assistant in the 1990s.

In an interview Thursday, his first public comments since his firing, Marimow said it was "heartening" to have the backing of Katz, Lenfest, and other supporters. "Their public spirit and civic-mindedness speak volumes about what's been happening at The Inquirer," he said.