DOUBLEDOWN DEBACLE
EYEBROWS were raised recently when the bankrupt Doubledown Media, which at one time published Trader Monthly and other glossies aimed at the wealthy Wall Street set, filed its latest financial disclosures documents and it showed some hefty six-figure sums going to the top two corporate officers.
A section entitled “withdrawls from a partnership or distributions by a corporations” shows CEO Randall Lane was given in $151,172.80 and James Dunning, the chairman and a 73 percent owner of the venture, was given $103,146.58 — which was described as “interest on loan.”
Lane said that his disbursement was his salary and expenses for the year. “I’d taken a 50 percent pay cut and personally put in about $50,000 of my own money to make payroll at the end,” said Lane.
“I put my entire life savings into the company,” he said. He estimated that as much as $400,000 to $500,000 is now basically worthless.
But Doubledown creditors will be more interested in the withdrawal made from the ailing Doubledown operation by Dunning, a mulit-millionaire publishing entrepreneur married to Martha Stewart‘s longtime publicist Susan Magrino.
At one point in his career, he had tried to put together a coalition to buy the New York Mets but lost out to Fred Wilpon and Nelson Doubleday. He did bought the old Petersen Publishing empire from its founder and flipped to British publisher Emap for $1.4 billion in the mid-1990s.
At Doubledown, Dunning replaced Magnus Greaves as the principal investor. Dunning eventually pumped in around $7 million.
Most vexing to former employees was the final $300,000 “loan” made in 2008 as debts were piling up and the landlord was getting ready to evict the company for non-payment of rent. Dunning’s loan was to convert into equity of the company defaulted on it.
Some question whether the withdrawal was legal. The filings seem to indicate that he was paid $103,146.58 and was still owed $197,195.84. One Dunning supporter claimed that he had helped keep the company afloat and the $103,146 was interest owed from past loans and that he stopped getting the interest payments once he made the last ditch $300,000 loan.
At another point, Dunning is listed as an unsecured creditor owed $197,195.
“I don’t understand why Jim Dunning of all people would get $100,000,” said one former investor, who has received no pay outs. “Employees did not get their last two weeks pay, people didn’t get their expenses and everyone had already had their pay cut in half.”
The court records show Dunning received his payments from February 2008 to November 4, 2008. Doubledown filed for Chapter 7 bankruptcy in February 2009, which means the business is closes and liquidated.
Originally, the company said it had assets and liabilities of $10 million to $50 million each. In its latest filing, the company listed assets of only $2.4 million and liabilities of $3,96 million. Keith J. Kelly
John Catanzaro, the general manager at Ramp Hummer, a dealership on East Jericho Turnpike on Long Island, remembers the good old days for the gas-guzzling SUV.
Just 16 months ago, in December 2007, people were lining up in freezing temperatures to buy fully-loaded versions of the then red-hot GM brand, Catanzaro told On The Money last week. They sold 95 Hummers that month, he remembers fondly.
Fast forward to last December and Catanzaro moved just 18 Hummers. But even that would be good today. With GM on the ropes and the future of the Hummer brand up in the air — Discontinued? Sold? Maintained? — the six-year old St. James dealership is selling just 10 a month, which is not good because Hummer is the only make the dealer sells.
“We are keeping our fingers crossed that GM keeps the brand alive,” said Catanzaro, a 30-year award-winning vet of the auto industry, who’s married with a six-year-old son. “If the Hummer goes, what do we do? We are hoping to stay in business, of course.”
Right now, there’s not much left of his business. The dealership retains a skeleton sales staff of two, plus Catanzaro. He has laid off a dozen staff in the last 12 months — plus three sales people voluntarily quit as demand for Hummers slowed.
Outside, roughly 35 gleaming $30,000-to-$50,000 Hummers — which can actually be had for about $23,000, including incentives — are parked and for sale.
“When gas was hitting near $5 a gallon we were selling record numbers of Hummers of all kinds,” said Catanzaro. “We didn’t have many customers who had poor credit scores — and if their credit was marginal I could have still gotten them a car loan.”
Catanzaro said the recession and questions about Hummer’s future are causing the sales slowdown. Some worry that parts and services — as well as Hummer resales — will be problematic if GM pulls the plug, or sells the brand, as it is mulling, he said.
Catanzaro is watching the government rescue of GM with cold detachment. “The ouster of [former GM CEO] Rick Wagoner didn’t help or hurt our sales,” he said. “GM should have moved much earlier to turn itself around and the government should have stepped in quicker,” Catanzaro said. “Everything was left until it was too late.”
John Aidan Byrne
business@nypost.com