Employees' Overtime Suit Forces Daily Voice to Seek Bankruptcy Protection | Street Fight

Employees’ Overtime Suit Forces Daily Voice to Seek Bankruptcy Protection

Employees’ Overtime Suit Forces Daily Voice to Seek Bankruptcy Protection

daily_voiceDaily Voice, the recently scaled-down regional network of 41 community news sites, filed for and won Chapter 11 bankruptcy protection this week. The move gives the company relief from an expensive class-action suit by two former reporters who said they and other Daily Voice staff worked overtime consistently but were never paid for the extra hours.

Approval of the petition, on Monday, April 7, in U.S. Bankruptcy Court in White Plains, N.Y., frees up Daily Voice finances so the company can continue to publish its digital sites, which are clustered in metro New York City suburbs in New York State and Connecticut.

The court action came two months after Daily Voice escaped potential closure by instituting major cost cutting that closed the network’s 11 community sites in Central Massachusetts, brought resignation of the corporate management team, closed corporate offices in New York City and consolidated some of its suburban newsrooms.

Daily Voice CEO Carll Tucker said removal of the overtime suit’s “liability overhang” means the company has the financial resources, from advertising revenues and investor commitments, to continue operations. “Everyone can come to the site today, tomorrow, next week, next month and next year,” he said.

Tucker, who founded Daily Voice as Main Street Connect in 2009 and was the company’s first CEO before stepping aside in 2011, owns 16% of the company and is one of its major investors. His wife, finance journalist Jane Bryant Quinn, owns 5.9%.

Tucker tied the suit to his company not establishing that reporters were classified as “exempt” from state and federal overtime laws. “That the law should treat them like factory workers punching a clock never occurred to me,” he said. The issue could have been avoided, he said, if Daily Voice had instituted bookkeeping showing that the reporters were paid for working 40 hours weekly.

Tucker said up until the Chapter 11 petition was filed, he had been hopeful the suit, filed in September 2012, would be settled through mediation. But, he added, “they [the two former reporters who filed suit on behalf of themselves and others] wouldn’t accept anything we could offer or that was fair.” Meanwhile, Daily Voice was incurring six-figure legal fees to defend itself.  “The fees were killing us,” he said.

If the two sides reach an agreement that’s approved by the court, Daily Voice presumably would emerge from Chapter 11. The reporters’ law firm, Hayber, in Hartford, Conn., did not immediately return an email seeking response.

The bankruptcy filing put on record many details about Daily Voice’s finances, including these numbers:

  • Investors, including Tucker, have put a total of $18,028,875.47 in the company.
  • Revenues were $1,542,354 in 2012, an increase of more than 50% from $1,049,000 in 2011.
  • Secured creditors are owed $550,000, of which $250,000 is owed to Tucker.
  • The company’s accounts receivable — from advertising bills that aren’t yet due or are overdue total $216,772.91.

Tom Grubisich authors The New News column for Street Fight. He is editorial director of LocalAmerica, which is partnering with InstantAtlas to develop sites that will present how communities rate in livability. Local America is featured on the Reynolds Journalism Institute’s Pivot Point site.

10 thoughts on “Employees’ Overtime Suit Forces Daily Voice to Seek Bankruptcy Protection

  1. So, $29k revenue per site in 2012? Shocking that that wasn’t working out for them.

    Forget Chapter 11, just liquidate and put this dog of an investment out of its misery.

  2. This article is an absolute joke. Mr. Grubisich, could you have made it any more obvious that you are in Carll’s pocket? The way your “publication” continues to spin the atrocities of TDV as positive measures is disgusting. You, Mr. Tucker and everyone remaining at TDV should be ashamed of your actions.

    1. Why should those who remain at the company feel any shame? With the current climate is it such a terrible thing to remain working to make ends meet? Surely only a very small handful of people are calling the shots there.

      1. Should have made that more clear: I was referencing the upper management still there calling the shots. Not the reporters, who are victims in this situation.

    1. Yep, in my hurry to get the story done, I did the math in my head. My iPhone calculator, which was as close to me as my head, is a lot smarter with numbers. Correct answer: 47%.

  3. StreetFight should be ashamed of itself for consistently publishing one-sided, inaccurate articles that for some bizarre reason, paint Mr. Tucker as a victim. This is not reporting; it’s a travesty. Perhaps someone other than Tom Grubisich should be assigned the next article about The Daily Voice. He continues to print the spin he’s presented with. Lazy, sloppy “journalism.”

  4. Bad math (revenues were up LESS than 50 percent, not more) and bad reporting. Ever think about talking to former reporters not involved in the suit? (FYI, 3, reporters, not 2, were listed in papers filed June 5, 2012). You let Mr. Tucker allude to reporters not being like factory workers, but do not check to see if they were TREATED like factory workers. Original requirement was 5 stories (assets, he called them) per day, 25 a week. Plus calendar listings. Plus internal meetings. In my decades in the business at dailies and weeklies, I never found a place with that kind of requirement, although I did work for a weekly group in Massachusetts with a 10-story weekly requirement. That group lost a similar law suit to a group of employees.

    You did a CYA with the lawyers for the plaintiffs, but stopped there. You allowed Mr. Tucker to spin the story that these ingrates were forcing him to spend all that money in legal fees without stopping to consider that, had he not violated labor laws, he would not have to try to defend himself with his silly assertion that rank-and-file, low-wage reporters are somehow exempt from protection. And, apparently, the courts allowed the suit to move forward, so it was not judged to be without merit. Now the millionaire Mr. Tucker intends to shaft the lawyers like he shafted his hard-working reporters, then like he shaft 45 members of his company in March with a “everything is great” email followed 2 days later by “I meant everything’s great for the low-wage workers we are not laying off and who will be forced to do more work to make up for the people I fired with NO SEVERENCE. Mr. Grubisch, your reporting would not get past my desk as an editor, and Street Fight should be ashamed of itself for allowing it to see the light of day. Readers should check out the Wall Streeet Journal site for a more complete take: http://blogs.wsj.com/bankruptcy/2013/05/08/extra-extra-read-all-about-the-daily-voices-bankruptcy/

  5. Carll is great with the snakeoil, too bad his buddies got left holding the bag. This was mismanaged from the start. People who know nothing about the web shouldn’t be running web sites.

    1. So right, the place was run by
      inexperienced people who mostly had no internet, news or local sales
      background. With $18 million raised, $500 K in legal fees shouldn’t have
      wiped them out. Maybe the rent on three offices (in addition to one that was never
      used for a year) might have something to do with it. Or, maybe the drinking
      parties with the “boys” and the expensive weekly lunches and after hours meet
      ups took their toll. The culture of spending started with Tucker,
      but Yardeni carried it forward. (An office in Tribeca for multiple
      thousands a month so he could walk to work?) Those of us who worked
      at Main Street Connect wondered why the touted all-star board muckity-mucks
      didn’t question the hiring of over-compensated unqualified people — and
      why a 500K burn rate for sites bringing in an average of less than 3K a
      month each wasn’t raising red flags.

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10 thoughts on “Employees’ Overtime Suit Forces Daily Voice to Seek Bankruptcy Protection

  1. So, $29k revenue per site in 2012? Shocking that that wasn’t working out for them.

    Forget Chapter 11, just liquidate and put this dog of an investment out of its misery.

  2. This article is an absolute joke. Mr. Grubisich, could you have made it any more obvious that you are in Carll’s pocket? The way your “publication” continues to spin the atrocities of TDV as positive measures is disgusting. You, Mr. Tucker and everyone remaining at TDV should be ashamed of your actions.

    1. Why should those who remain at the company feel any shame? With the current climate is it such a terrible thing to remain working to make ends meet? Surely only a very small handful of people are calling the shots there.

      1. Should have made that more clear: I was referencing the upper management still there calling the shots. Not the reporters, who are victims in this situation.

    1. Yep, in my hurry to get the story done, I did the math in my head. My iPhone calculator, which was as close to me as my head, is a lot smarter with numbers. Correct answer: 47%.

  3. StreetFight should be ashamed of itself for consistently publishing one-sided, inaccurate articles that for some bizarre reason, paint Mr. Tucker as a victim. This is not reporting; it’s a travesty. Perhaps someone other than Tom Grubisich should be assigned the next article about The Daily Voice. He continues to print the spin he’s presented with. Lazy, sloppy “journalism.”

  4. Bad math (revenues were up LESS than 50 percent, not more) and bad reporting. Ever think about talking to former reporters not involved in the suit? (FYI, 3, reporters, not 2, were listed in papers filed June 5, 2012). You let Mr. Tucker allude to reporters not being like factory workers, but do not check to see if they were TREATED like factory workers. Original requirement was 5 stories (assets, he called them) per day, 25 a week. Plus calendar listings. Plus internal meetings. In my decades in the business at dailies and weeklies, I never found a place with that kind of requirement, although I did work for a weekly group in Massachusetts with a 10-story weekly requirement. That group lost a similar law suit to a group of employees.

    You did a CYA with the lawyers for the plaintiffs, but stopped there. You allowed Mr. Tucker to spin the story that these ingrates were forcing him to spend all that money in legal fees without stopping to consider that, had he not violated labor laws, he would not have to try to defend himself with his silly assertion that rank-and-file, low-wage reporters are somehow exempt from protection. And, apparently, the courts allowed the suit to move forward, so it was not judged to be without merit. Now the millionaire Mr. Tucker intends to shaft the lawyers like he shafted his hard-working reporters, then like he shaft 45 members of his company in March with a “everything is great” email followed 2 days later by “I meant everything’s great for the low-wage workers we are not laying off and who will be forced to do more work to make up for the people I fired with NO SEVERENCE. Mr. Grubisch, your reporting would not get past my desk as an editor, and Street Fight should be ashamed of itself for allowing it to see the light of day. Readers should check out the Wall Streeet Journal site for a more complete take: http://blogs.wsj.com/bankruptcy/2013/05/08/extra-extra-read-all-about-the-daily-voices-bankruptcy/

  5. Carll is great with the snakeoil, too bad his buddies got left holding the bag. This was mismanaged from the start. People who know nothing about the web shouldn’t be running web sites.

    1. So right, the place was run by
      inexperienced people who mostly had no internet, news or local sales
      background. With $18 million raised, $500 K in legal fees shouldn’t have
      wiped them out. Maybe the rent on three offices (in addition to one that was never
      used for a year) might have something to do with it. Or, maybe the drinking
      parties with the “boys” and the expensive weekly lunches and after hours meet
      ups took their toll. The culture of spending started with Tucker,
      but Yardeni carried it forward. (An office in Tribeca for multiple
      thousands a month so he could walk to work?) Those of us who worked
      at Main Street Connect wondered why the touted all-star board muckity-mucks
      didn’t question the hiring of over-compensated unqualified people — and
      why a 500K burn rate for sites bringing in an average of less than 3K a
      month each wasn’t raising red flags.

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