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American Morning
Bitter Legal Fight Between Rosie O'Donnell, Former Publisher Drawing to Close
Aired November 11, 2003 - 07:35 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
SOLEDAD O'BRIEN, CNN ANCHOR: The bitter legal fight between Rosie O'Donnell and the former publisher of her magazine is drawing to a close. They are battling over who's to blame for the failure of "Rosie" magazine. Both sides have spent much of the time in court trading punches. Yesterday, it was all about bookkeeping.
Here's CNN's Mary Snow.
(BEGIN VIDEOTAPE)
MARY SNOW, CNN CORRESPONDENT (voice-over): With her testimony on the stand over, Rosie O'Donnell showed up for the final stages of her trial against Gruner & Jahr both relieved, she said, and eager.
ROSIE O'DONNELL, ENTERTAINER: The nerves are gone. As soon as I was able to tell my story, I'm quite happy with the progress of the trial and I'm looking forward to Judge Gammerman's decision.
SNOW: While much of the trial has focused on name calling, the last stage turned to the money. O'Donnell's lawyers are claiming that books were cooked at the magazine to keep O'Donnell at the magazine. They zeroed in on a clause in the joint agreement that would have allowed either party to walk away from their contract if they lost more than $4.2 million by June of 2002.
In an e-mail to G&J's CEO in Germany, the U.S. chief financial officer wrote, "The management team of G&J USA is recommending to you that we manage the financials such that we don't fall below the required threshold point so that we can continue to publish "Rosie." We are asking for your approval to this strategy."
G&J's Germany CEO testified on videotape that he didn't recall ever getting the e-mail, but that the company does not manage books or manipulate numbers.
O'Donnell's lawyers claim that because the magazine was losing money, G&J was making editorial changes, in violation of O'Donnell's contract, to boost sales.
O'DONNELL: Well, I'm sad to say that the case is not over today. Our law team fully expected that we would be done today. But unfortunately the opposing side still has more to do.
SNOW (on camera): This trial resumes on Wednesday, when both sides are expected to rest their case. And then it will be up to a judge to decide whether Rosie O'Donnell or publisher Gruner & Jahr breached the contract.
Mary Snow, CNN, New York.
(END VIDEOTAPE)
O'BRIEN: Carolina Buia is a correspondent for the vote show "Celebrity Justice."
She has been, as you all well know, covering the O'Donnell case because chat each and every day.
Good morning.
Nice to see you again.
CAROLINA BUIA, CORRESPONDENT, "CELEBRITY JUSTICE": Good morning.
Nice to see you.
O'BRIEN: Well, is it fair to call this -- let's call it creative bookkeeping -- a smoking gun in this case? Or is that going too far?
BUIA: No, I would say it's a smoking gun. They went -- Rosie O'Donnell's defense team went straight for the jugular. I mentioned yesterday this $4.2 million figure for Gruner & Jahr...
O'BRIEN: That's kind of the bar.
BUIA: Yes, that was...
O'BRIEN: They had to be there, otherwise they could -- she could close the magazine.
BUIA: Otherwise both sides could dissolve the partnership within 10 days. But how can you dissolve a partnership if you have no idea that your magazine is losing over $4.2 million?
Now, the CFO for Gruner & Jahr said we only lost $3.8 million that fiscal year. But then he went on to say that he took Rosie's almost $6 million investment and used it to absorb the many millions of dollars that were being lost over the $4.2 million benchmark. So how could Rosie O'Donnell know that her magazine was in trouble? How could she know to back out?
It smells like cooking the books to me. I mean you'd have to talk to somebody from Arthur Andersen to get the exact terminology, but it does not look good for the other side.
O'BRIEN: We need somebody. And I imagine, of course, today, Gruner & Jahr is going to be back on the stand trying to...
BUIA: Actually, today there is a recess because of Veteran's Day.
O'BRIEN: Oh, right. Of course.
BUIA: But tomorrow and Wednesday...
O'BRIEN: Tomorrow, right.
BUIA: ... yes, we're going to have the cross-examination from one of Rosie O'Donnell's witnesses. He's a specialist from Deloitte & Touche who's looking through the books and saying, yes, there was clearly some creative accounting going on.
O'BRIEN: Do you think at this point anyone's thinking that G&J could settle this case, would want to settle this case? Are there talks in the works to say you know what, it's starting to get a little ugly.
BUIA: A little bad for them.
O'BRIEN: Right.
BUIA: Especially in the public sphere. You know, there have been a lot of rumblings that they've been going through settlement talks. And both sides say they would like to settle this case, but they can't seem to come to an agreement.
Maybe after yesterday's testimony, they'll be more inclined to try and find common ground.
O'BRIEN: A holiday today. Tomorrow we're going to see more cross-examination. When does this all end? And when will the judge get the case and how long is it expected before he makes a decision?
BUIA: This will, the trial part of this will probably all end on Wednesday, unless there are some other witnesses. It should wrap up by Wednesday. And as for the judge's decision, you know, he could take a few days, he could take a few weeks. This is a judge who's actually retiring December 31. He could even...
O'BRIEN: He has till then.
BUIA: He hast till then, or, actually, he could take this into their retirement. Both sides agreed that hew would have jurisdiction. But I don't think he wants to, you know, go off to Barbados and continue to look through this case.
He'll probably make a decision within the next few weeks.
O'BRIEN: Give me a short answer on this one. Has this case, do you think, damaged Rosie's credibility? Has it damaged the affection of the public that they had for her after the show? Because we've learned some very unpleasant things, I think it's fair to say, about her and her language, which she freely admits, and her temper, which she freely admits, too.
BUIA: You know, I think -- I don't think it's damaged her credibility and I think now she's got a new forum, her Broadway show "Taboo," which opens on Thursday. So let's see how that does.
O'BRIEN: All right, Carolina Buia, as always, thanks so much. We'll check in with you again.
Appreciate it.
BUIA: Thank you.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Publisher Drawing to Close>
Aired November 11, 2003 - 07:35 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
SOLEDAD O'BRIEN, CNN ANCHOR: The bitter legal fight between Rosie O'Donnell and the former publisher of her magazine is drawing to a close. They are battling over who's to blame for the failure of "Rosie" magazine. Both sides have spent much of the time in court trading punches. Yesterday, it was all about bookkeeping.
Here's CNN's Mary Snow.
(BEGIN VIDEOTAPE)
MARY SNOW, CNN CORRESPONDENT (voice-over): With her testimony on the stand over, Rosie O'Donnell showed up for the final stages of her trial against Gruner & Jahr both relieved, she said, and eager.
ROSIE O'DONNELL, ENTERTAINER: The nerves are gone. As soon as I was able to tell my story, I'm quite happy with the progress of the trial and I'm looking forward to Judge Gammerman's decision.
SNOW: While much of the trial has focused on name calling, the last stage turned to the money. O'Donnell's lawyers are claiming that books were cooked at the magazine to keep O'Donnell at the magazine. They zeroed in on a clause in the joint agreement that would have allowed either party to walk away from their contract if they lost more than $4.2 million by June of 2002.
In an e-mail to G&J's CEO in Germany, the U.S. chief financial officer wrote, "The management team of G&J USA is recommending to you that we manage the financials such that we don't fall below the required threshold point so that we can continue to publish "Rosie." We are asking for your approval to this strategy."
G&J's Germany CEO testified on videotape that he didn't recall ever getting the e-mail, but that the company does not manage books or manipulate numbers.
O'Donnell's lawyers claim that because the magazine was losing money, G&J was making editorial changes, in violation of O'Donnell's contract, to boost sales.
O'DONNELL: Well, I'm sad to say that the case is not over today. Our law team fully expected that we would be done today. But unfortunately the opposing side still has more to do.
SNOW (on camera): This trial resumes on Wednesday, when both sides are expected to rest their case. And then it will be up to a judge to decide whether Rosie O'Donnell or publisher Gruner & Jahr breached the contract.
Mary Snow, CNN, New York.
(END VIDEOTAPE)
O'BRIEN: Carolina Buia is a correspondent for the vote show "Celebrity Justice."
She has been, as you all well know, covering the O'Donnell case because chat each and every day.
Good morning.
Nice to see you again.
CAROLINA BUIA, CORRESPONDENT, "CELEBRITY JUSTICE": Good morning.
Nice to see you.
O'BRIEN: Well, is it fair to call this -- let's call it creative bookkeeping -- a smoking gun in this case? Or is that going too far?
BUIA: No, I would say it's a smoking gun. They went -- Rosie O'Donnell's defense team went straight for the jugular. I mentioned yesterday this $4.2 million figure for Gruner & Jahr...
O'BRIEN: That's kind of the bar.
BUIA: Yes, that was...
O'BRIEN: They had to be there, otherwise they could -- she could close the magazine.
BUIA: Otherwise both sides could dissolve the partnership within 10 days. But how can you dissolve a partnership if you have no idea that your magazine is losing over $4.2 million?
Now, the CFO for Gruner & Jahr said we only lost $3.8 million that fiscal year. But then he went on to say that he took Rosie's almost $6 million investment and used it to absorb the many millions of dollars that were being lost over the $4.2 million benchmark. So how could Rosie O'Donnell know that her magazine was in trouble? How could she know to back out?
It smells like cooking the books to me. I mean you'd have to talk to somebody from Arthur Andersen to get the exact terminology, but it does not look good for the other side.
O'BRIEN: We need somebody. And I imagine, of course, today, Gruner & Jahr is going to be back on the stand trying to...
BUIA: Actually, today there is a recess because of Veteran's Day.
O'BRIEN: Oh, right. Of course.
BUIA: But tomorrow and Wednesday...
O'BRIEN: Tomorrow, right.
BUIA: ... yes, we're going to have the cross-examination from one of Rosie O'Donnell's witnesses. He's a specialist from Deloitte & Touche who's looking through the books and saying, yes, there was clearly some creative accounting going on.
O'BRIEN: Do you think at this point anyone's thinking that G&J could settle this case, would want to settle this case? Are there talks in the works to say you know what, it's starting to get a little ugly.
BUIA: A little bad for them.
O'BRIEN: Right.
BUIA: Especially in the public sphere. You know, there have been a lot of rumblings that they've been going through settlement talks. And both sides say they would like to settle this case, but they can't seem to come to an agreement.
Maybe after yesterday's testimony, they'll be more inclined to try and find common ground.
O'BRIEN: A holiday today. Tomorrow we're going to see more cross-examination. When does this all end? And when will the judge get the case and how long is it expected before he makes a decision?
BUIA: This will, the trial part of this will probably all end on Wednesday, unless there are some other witnesses. It should wrap up by Wednesday. And as for the judge's decision, you know, he could take a few days, he could take a few weeks. This is a judge who's actually retiring December 31. He could even...
O'BRIEN: He has till then.
BUIA: He hast till then, or, actually, he could take this into their retirement. Both sides agreed that hew would have jurisdiction. But I don't think he wants to, you know, go off to Barbados and continue to look through this case.
He'll probably make a decision within the next few weeks.
O'BRIEN: Give me a short answer on this one. Has this case, do you think, damaged Rosie's credibility? Has it damaged the affection of the public that they had for her after the show? Because we've learned some very unpleasant things, I think it's fair to say, about her and her language, which she freely admits, and her temper, which she freely admits, too.
BUIA: You know, I think -- I don't think it's damaged her credibility and I think now she's got a new forum, her Broadway show "Taboo," which opens on Thursday. So let's see how that does.
O'BRIEN: All right, Carolina Buia, as always, thanks so much. We'll check in with you again.
Appreciate it.
BUIA: Thank you.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Publisher Drawing to Close>
