Moving to Nashville as UPI Assistant General Counsel
With UPI having moved out from under the Scripps administrative umbrella, the company needed to create a standalone internal law department for the first time. Linda had a varied practice at Hopkins & Sutter and had no desire to fill this role by moving to Nashville. She remembered that I was looking for a corporate law position and that I had already created one law department from scratch at Bradford. She asked me to think about starting UPI’s law department in Nashville and serving there as the company’s Assistant General Counsel.
On the plus side, this sounded like a good opportunity, though on the negative side it would entail moving with Cathy and our three-year- old son Andy to Nashville. It was certainly worthy of a serious look on my part, so I travelled to Nashville to meet with Ruhe, Geissler and Alhauser to learn more about UPI’s plans and finances.
I first met with Ruhe in the pie-shaped Focus Communication office in a bank building in downtown Nashville. Ruhe was a whirlwind of upbeat blather, who presented himself as a know-it- all, “I see the future!” business wunderkind. He explained to me more than once that owning a television station was like having “a license to make money.”
My dinner meeting with Geissler was, in a Pythonesque way, something entirely different. Geissler had been born in Venezuela and was fluent in Spanish as well as English. During dinner, he strangely had little to say in either language about anything. For whatever reason, he remained largely catatonic throughout our meal.
Since Linda had little direct knowledge of the company’s current financial condition, she had steered me to UPI Treasurer Bill Alhauser for the straight dope. I was entirely focused on the state of UPI’s finances when we met and my questions to the mild-mannered Alhauser about the company’s financial position were very direct. As I later found out, I was not the only one he regularly misled. As a result, while I had met the three principal operating managers of UPI, and was generally aware of its turnaround posture, I hadn’t a clue the company would crater in the next 18 months and that I would get the post-graduate education in bankruptcy law that I never got in law school. Contrary to the rosy picture painted by both Ruhe and Alhauser, UPI actually ended 1983 with a loss of $14 million and was facing debts of $15 million. Peanuts today perhaps, but a lot of money in 1983.
Though I didn’t know it at the time I was meeting with Ruhe, Geissler and Alhauser, UPI was regularly having a hard time meeting payroll. Fortunately for UPI, Tom Haughney found that Los Angeles-based high-risk lender Foothill Capital Corporation was willing to lend UPI $4 million. The loan would cover payrolls for a period of time and would help deal with arrearages due AT&T and RCA. Unfortunately for UPI, the loan carried an interest rate of 14.25%, three points above prime in that period of still high inflation.
With this background that I knew nothing about, in early 1984 Cathy, Andy and I settled into our new home in the Nashville suburb of Brentwood, not far from UPI’s new business headquarters there.