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UPI's chief exec warns staff: VanBennekom says employee 'rumor mongering' has dissuaded some prospective buyers from the financially troubled news service.

UPI's chief exec warns staff

VanBennekom says employee |rumor mongering' has dissuaded some prospective buyers from the financially troubled news service

Warning that "loose lips sink ships," United Press International's Pieter VanBennekom has urged staffers to ease up on the "rumor mongering" that "has already caused casualties among prospective buyers since November."

VanBennekom, UPI executive vice president and chief executive officer, has emerged over the past few months as the point man for a sale of the financially beleaguered wire service.

Noting that the current management of parent company Infotechnology was set up as an interim measure for restructuring after the ouster of former chairman Earl Brian, VanBennekom told E&P that responsibility for UPI negotiations now "falls on my shoulders," as the "status of talks is now beyond mere balance sheet issues."

Severance pay problems

VanBennekom also was slated for a meeting at the request of Wire Service Guild leadership regarding severance payments to former employees.

"One of the topics of discussion will no doubt be the temporary suspension of severance pay to some former colleagues," he wrote in a memo to staffers sent over UPI's internal message system. "I know many of you have felt that it was incongruous that, while working Unipressers were receiving sharply reduced wages, those who chose voluntary buyouts or other severance packages were receiving checks each payday for 100% pay. We and our attorneys continue to review this matter."

WGS president Kevin Keane pointed out that, when UPI cut off severance pay, the Guild was told it was because of cash flow problems.

"They can be unhappy, but they can't change it," Keane said of the severance agreements. "It would be illegal to try and get out of it."

UPI and the Guild were scheduled to meet this week as E&P went to press.

In his memo to Unipressers, VanBennekom called on them to stop spreading rumors about potential buyers.

"High-profile investors, especially those from within the news industry, do not want premature visibility, in the interest of minimizing disruptions in UPI or their own organizations" he wrote, in part. "If reckless talk continues, I may very well face more such casualties among key investment prospects. At the same time, rampant speculation dangerously diverts precious editorial time toward counterproductive activity . . . .

"I plan further travels in coming weeks. It could prove tragic if my effort to consummate an agreement reopens the floodgates of rumor. Only you can avert this."

VanBennekom added that he has "been able to stimulate new interest in different parts of the world" and that he remains confident a new opportunity will emerge for UPI as a news and information company "within a fresh corporate structure."

"It is conceivable," he wrote April 2, "I will be in a position to unveil this new corporate entity by month's end, but that is, frankly, less likely than a May release. As always, I would add that any number of factors could scuttle delicate financial negotiations . . . .

"In closing, let me again ask your diligence in putting a halt to the rumors that have nearly knocked me out of the saddle on several occasions, so that I may focus my energy on achieving a reorganization that I now believe will represent a break from UPI's decade of disappointments," VanBennekom added.

In an interview with E&P at UPI headquarters about the memo, VanBennekom said he was trying to "appeal to people's common sense . . . I wish that people would stop and think about what they are doing."

He said that potential investors alluded to in rumors or print then tend to think three things of the company: that UPI leadership is not worthy of their confidence; that it was a deliberate leak to steer negotiations; or, "even worse," that UPI can't even tell a straight story, as rumors tend to get distorted when they are repeated.

Further, while VanBennekom said he has no evidence that people now are trying to steer things one way or the other by leaking information, he noted that in UPI's history there were deliberate information leaks designed to scuttle negotiations.

"I understand the natural curiosity of these people," he said of Unipressers, but, he added, an "open town meeting" approach to a sale is not workable.

Asking staffers to go along with this is "not blind faith," he said. "UPI will continue to exist and will continue to provide employment opportunities."

He added that "no one's a slave . . . they're free to leave."

VanBennekom pledged that the introduction of a new owner or new owners will not be done as it was with Ruhe and Geissler in the spring of 1982, when they were simply brought in one day and presented to the staff.

Noting that there will be letters of intent and contracts and a period of time when a buyer comes forward before a deal is made final, VanBennekom said there will be complete openness about the buyers and the deal.

"The investigative reporters will dig it out anyway," he added.

While he did not rule out another bankruptcy filing for the financially oppressed company, VanBennekom said talks have not progressed that far and UPI's "some accounts payable" is not a major factor in doing a deal.

He noted that UPI does not carry bank debts as does its parent company, Infotechnology Inc., which has filed for Chapter 11 bankruptcy reorganization. While the bankruptcy court would likely have to be notified in the event of a UPI sale, VanBennekom said that is not a "monkey wrench" in the works.

He does "not want to play the numbers game again" regarding how many potential buyers may be out there, but he did confirm that there is more than one.

"There's real good to be achieved here," he added. "I don't do this to jerk people around. I do this for a purpose [and] I hope the purpose will be worthwhile."
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Title Annotation:United Press International's Pieter VanBennekom
Author:Gersh, Debra
Publication:Editor & Publisher
Date:Apr 13, 1991
Words:980
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