A co-founder of Truthdig.com is seeking to dissolve the company behind the news website in the midst of a dispute with her longtime business partner and fellow journalist.
Zuade Kaufman’s Los Angeles Superior Court lawsuit, filed Wednesday against Robert Scheer, also seeks attorneys’ fees and recovery of her costs for bringing the complaint.
Scheer could not be immediately reached for comment.
Kaufman and Scheer created the Truthdig LLC in 2005 and have worked for more than 20 years together, both at Truthdig and before as reporters at The Los Angeles Times, the suit states. She and Scheer are managing members of the firm and each owns half, according to the suit.
Kaufman is Truthdig’s publisher and CEO, and Scheer is editor-in-chief, the suit states.
They founded Truthdig based on their shared progressive values and during the past 15 years, the website has become a reputable news organization providing a platform for expert reporting and commentary, the suit states. Truthdig has received numerous accolades and awards over the years, according to the complaint.
Kaufman contributed the initial financial capital to the Company and has provided the majority of the funding over the years, the suit states.
While the parties at first hoped that Truthdig would be financially self-sustaining, it became increasingly clear that it would not be even though both Kaufman and Scheer worked without compensation as managers, the suit states. However, the company paid Scheer for most of the columns he wrote, making him the only one of the two managing members who received income from the company, the suit states.
Kaufman also shored up Truthdig’s finances by repeatedly loaning the company money to assure the survivability of the website, the suit states. As of December 2017, the debt owed to Kaufman amounted to $4.8 million, plus the agreed 10% interest, the suit states.
While Kaufman has devoted full time to Truthdig, Scheer has devoted much of his time to teaching and hosting a podcast, an activity in which the company held no business interest, the suit states. Scheer last submitted an original column to Truthdig in 2018, the suit states.
In recent years, Scheer has been active on a part-time basis with Truthdig so he can focus on other activities, the suit alleges. Although he has many professional contacts, in recent years Scheer has failed to provide them to the benefit of the company, the suit states.
After KCRW radio management decided to stop paying for Scheer’s podcast, he created more tension with Kaufman by repeatedly pressuring her to provide funding, the suit states.
“By late 2019, it had become increasingly clear to plaintiff that the working relationship between her and Scheer was not a good one and needed to change,” the suit states. “Scheer was pressuring plaintiff to devote more financial resources to the venture while he was spending less time himself on it.”
During a discussion, Scheer appeared to think Kaufman proposed to shut down Truthdig so they could both go their own ways, but she replied that she did not want to shut down the website, “which was a labor of love for her and she thought it was an important platform for independent progressive journalism,” the suit states.
Before Kaufman could discuss the matter further, an angry Scheer stood up and said that she would need to pay him a large sum of money or the disentanglement of the relationship would be ugly and litigious, the suit states.
Accepting that she and Scheer were deadlocked, and that dissolution was inevitable, she asked Scheer to agree to file for voluntary dissolution of the company on March 20, 2020, the suit states. However, Scheer did not agree and made no proposals to save Truthdig, the suit states.
“Faced with no reasonable option, plaintiff informed Scheer that she was ceasing publishing on the company website because the company is running out of funds to operate, the suit states.
Kaufman tried and failed to mediate their dispute, forcing her to sue to seek dissolution of the company, the suit states.
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