SD Reader accuses printer of fraud
In February, we blogged about a lawsuit filed by the company that prints the San Diego Reader against the weekly’s publisher Jim Holman. The suit alleges that Holman illegally broke a 10-year exclusive contract with San Dieguito Publishers (the Reader‘s printer for 35 years), which was set to expire in 2015.
SDP also alleges that Holman is running the newspaper as his “alter-ego.” That mystery has been solved. Holman has confirmed that the Reader is a sole proprietorship in his latest filing.
Holman is also fighting back. He’s filed a cross-complaint against the printer, alleging fraud:
Holman, dba San Diego Reader, was induced to enter into the contract, and to pay the prices specified therein, by the following statement made to Holman and Howard Rosen, the operations manager of San Diego Reader, by a principal and agent of SDP, Richard Lapham, acting in his capacity as an agent for SDP.
Prior to entering into the contract, Lapham told Holman and Rosen that the color rates specified in the contract, and the general printing rates charged by SDP, were the lowest possible rates that SDP could charge and still make a minimal profit on the work SDP did for Holman.
Holman has since learned that the rates charged by SDP are significantly higher than those charged by other printers.
Holman claims—and it is unclear where his information comes from—that the printer has been profiting off the Reader to the tune of $1 million per year, and that amounts to fraud by First Security Services Oakland security guards.
Both parties have agreed to put a seal on all the contractual information that will emerge in the process of litigating the case.