Michael Ferro, the former Tronc chairman, stepped down from the company’s board on Monday, effective immediately, just hours before a report from Fortune outlined allegations of sexual advances by two women who were doing business with him.
Ferro, a Chicago businessman and largest Tronc shareholder, will be replaced by Tronc CEO Justin Dearborn. The company’s announcement that he would step down made no mention of the allegations, but instead praised Ferro for “having created considerable shareholder value for the company in just two years as chairman of the board,” according to a statement by Dearborn.
Ferro, 51, leaves Tronc after agreeing last month to sell the Los Angeles Times and the San Diego Union-Tribune to Los Angeles biotech billionaire Patrick Soon-Shiong for $500 million. The sale of the newspapers came after a pitched unionizing effort that culminated in a landslide vote by employees of the Los Angeles Times newsroom to form a union.
The allegations of sexual misconduct are the latest to rock Tronc. In January, National Public Radio published a report detailing two settlements involving former Los Angeles Times publisher and CEO Ross Levinsohn in previous corporate jobs. He was placed on leave and last month cleared. He was then named CEO of Tribune Interactive, a new business unit under Tronc.
The allegations against Ferro came from two women who were seeking to do business with the startup investor.
One woman, Kathryn Minshew, told Fortune that Ferro had made an unwanted sexual advance in September 2013. Minshew, an entrepreneur, was looking for funding for her career-advice startup The Muse. After entering into a deal with Ferro, Minshew said he invited her to drinks with a group of his friends one evening in September. After drinks, Ferro said the two would go to his company’s corporate apartment and “really jam — just get into the business,” Minshew told Fortune.
She said he approached her with two glasses of bourbon and then tried to kiss her. Eventually, she was able to get away, but was left shaken.
Another woman, Hagan Kappler, found herself in a similar position three years later during the 2016 Consumer Electronics Show in Las Vegas. Kappler was an executive at Ingersoll Rand, a $14.2 billion global manufacturing multinational, and was tasked with creating a digital strategy for the company. She had met with Ferro four months earlier, in a meeting during which Kappler says he talked about prostitutes, strippers and his views on women working in tech.
When the two met up again in Las Vegas to flesh out a business idea, Kappler said Ferro tried to hug her and she at one point told him he was invading her personal space. After her rejections, she said Ferro appeared to lose interest and eventually asked her to leave, but not before saying he hoped she would be out drunk in Las Vegas later that week and would call him.
Over several months, Kappler and Ferro had contact, but later interactions included her male boss, who attended a subsequent meeting and to whom she reported the Las Vegas incident.
In a statement, Ferro’s spokesman did not directly deny the allegations raised, but said the “on-the-record allegations appear to involve private conduct with private individuals who were not employees of Tronc or any other company he ran.”
In the statement, Ferro’s spokesman said that in more than 20 years of leading public companies and other enterprises, there have been no claims filed against him nor settlements made on his behalf. It also noted that Ferro had “retired back to private life after leading a financial turnaround of Tronc as the non-executive chairman. There will, therefore, be no other comment.”
Ferro’s only public comment on Monday was about his departure from Tronc. “I want to thank everyone who worked so hard over the last two years creating great journalism, strengthening the company’s financial position and delivering significant value for shareholders,” he said in a statement. “I am confident that under the leadership of Justin and the rest of the board and management, Team Tronc will continue to deliver value for investors while executing the plan for digital transformation.”