Nasty court battle over Rosie mag begins

Lawyers for O'Donnell, G + J face off

A correction was made to this article on Oct. 31, 2003.

Call it “Breach of Contract,” the show.

Lawyers for Rosie O’Donnell and her former magazine publisher, Gruner + Jahr, faced off in New York State Court on Thursday, each accusing the other of violating the provisions of their partnership. Judge Ira Gammerman, who previously handled the celeb trials of Woody Allen and Joan Collins, is presiding over the case.

G+J (a division of German media conglom Bertelsmann) is seeking $100 million, saying that O’Donnell caused magazine “Rosie” to fold when she walked off the job in September 2002. O’Donnell, alleging that the publisher cooked circulation figures, has retaliated with a $125 million countersuit. Mag launched in 2001.

Lower Manhattan courtroom was packed with press and public. Because standing room was not allowed, bailiffs brought in extra seating to accommodate interested onlookers.

In opening statements, G+J counsel Martin Hyman said O’Donnell’s countersuit likewise alleging breach of contract was “manufactured by a team of lawyer’s publicists and family members.” At one point, he even took a swipe at O’Donnell’s publicist, Cindi Berger of PMK HBH. Latter, who escorted O’Donnell into court, was referred to as “self-proclaimed expert at celebrity damage control.”

Early trouble in 2001

According to G+J, the first sign of trouble came in late 2001, when newsstand figures dipped, but a larger point of contention arose in May 2002 over a cover photo for the August 2002 issue featuring the female stars of “The Sopranos” with O’Donnell. In that instance, new editor-in-chief Susan Toepfer and O’Donnell could not agree on which photo to use. Amid the struggle for creative control, “Rosie wanted to take risks but with G+J’s money,” said Hyman.

In the timeline of events, Hyman also said that that spring O’Donnell became interested in producing Boy George’s musical “Taboo,” but Boy George had rejected her as “too suburban.” Soon after, O’Donnell abandoned her “Queen of Nice” image. (Previews of O’Donnell-produced “Taboo” began Tuesday evening.)

G+J relied heavily on a series of emails between O’Donnell and G+J staff in which O’Donnell would vividly express her displeasure. One included a draft of her letter to the readers in which she said she would be a controlling “uberbitch” and if readers didn’t like it they needn’t buy the magazine. In defense remarks, O’Donnell’s side rebutted that it was merely a rough draft with which O’Donnell could communicate her feelings to G+J.

Accounting errors?

G+J lawyer Hyman also said upcoming testimony would dispute defense claims of accounting errors regarding the magazine’s circulation numbers.

Lorna Schofield of white-shoe firm Debevoise & Plimpton represented O’Donnell. Describing her client, Schofield said, “She’s not Mother Teresa. She’s loud, she has a temper. When provoked, she yells and cusses. But what you see is what you get. It’s part of her persona.”

Schofield likened the dispute to a “struggle for the steering wheel and what the destination was.”

Defense laid out a list of 12 grievances they claim resulted in O’Donnell’s desire to extract herself from the magazine. Schofield said O’Donnell was within in her rights to terminate the partnership, exercising a contractual provision that allowed her to leave “upon written notice if material breach is not cured in 30 days.” O’Donnell invested nearly $6 million of her own money into the mag.

The defense claimed that G+J had undermined O’Donnell’s editorial control, disparaged her in the press and reported an inflated rate base of 3.5 million, a bigger guarantee than either Oprah (2 million) or Martha Stewart Living (2.2 million) made to advertisers. Pact allowed either side to quit if losses exceeded $4.2 million. O’Donnell’s team said the circulation numbers were cooked to prevent her from opting out.

The final straw for O’Donnell came in the summer of 2002, when a security guard stood watch when she and advisers waited to attend a meeting at G+J offices.

In September 2002, O’Donnell pulled out of the magazine. G+J filed suit in October. According to the publisher’s attorney, O’Donnell’s resignation led to the loss of more than 100 jobs and caused G+J to lose millions of dollars.

O’Donnell was in court Thursday, sitting patiently at the defense table. At the first break, she stopped to look at the work of the courtroom sketch artists.

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