At one point this week, it looked as if the plug finally had been pulled at United Press International.
Midway through a statement by the Wire Service Guild on the company's latest financial crisis, the wire machine at the news agency's 14th Street headquarters simply stopped. "There were lots of jokes that maybe the statement was too strong for the wire to stand," said Lou Carr, UPI assistant managing editor for news.
Yesterday, with agreement on a new financial plan to save the news agency from bankruptcy, the mixture of tension and humor that filled the newsroom earlier this week had given way to relief. "The mood has swung way up," Carr said.
"You get used to it," reporter Tom Ferraro said of the company's ongoing financial crisis. "This place is not for the weak of heart. . . . We'll make it."
UPI reported yesterday that owners Douglas Ruhe and William Geissler had yielded to "intense pressure from creditors" to give up their 90 percent control of the company. A company statement said the two men agreed to return operating control of the company immediately to former president Luis Nogales, whom they fired Sunday during negotiations over UPI's restructuring.
Meetings are being scheduled with the company's creditors to offer them equity in the company, UPI said in a statement.
UPI's chief lender and one of its major creditors is Foothill Capital Corp. of Los Angeles. Other major creditors are American Telephone & Telegraph Co., American Express Co. and RCA Corp. AT&T said it does not believe it can assume any equity in UPI because the terms of its 1982 divestiture agreement bars it from entering the news and information business.
UPI turned a $1.1 million profit in the last quarter of 1984, but has debts of about $17 million. Nogales said the company will have "sufficient cash to operate normally" because of support from Foothill.
As UPI's story on the agreement was being written, however, employes in the newsroom talked about yesterday's statement by the guild that about $300,000 worth of payroll checks bounced after Nogales was fired. UPI spokesman William Adler said the company was only aware of two or three bounced checks, which were immediately redeposited and covered.
Foothill apparently cut off UPI's revolving credit line to pressure Ruhe and Geissler into accepting the proposed restructuring, UPI reported. Once Nogales was reinstated, so was the cash flow -- including an extra $500,000 set aside to cover any possible bounced checks, Adler said.
"I, personally, do not know of any bounced paychecks," said Carr, a UPI employe since 1947. "We're waiting to see what the next move is," he said, as the two UPI reporters covering the story huddled over notepads and a computer terminal.
"There was a time when everybody was just waiting for Greg's next lead," said feature writer Iris Krasnow, referring to coverage of the roller coaster negotiations by UPI reporters Gregory Gordon and D'Vera Cohn.
Throughout the week's tense negotiations, "there was a determination not to let the troubles of the company interfere with our coverage of the news," Carr said.
"There have been so many times like this, you just get seasoned," Krasnow said. "I just want to do my stories."
UPI's employes were persuaded to take a 25 percent pay cut in September in hopes of making a profit and attracting additional investment. Ruhe and Geissler bought the international wire service in 1982 for $1 from E. W. Scripps Co.
Several UPI employes expressed faith in Nogales and confidence in the agreement finalized yesterday.
Under the agreement, Nogales will become chairman and chief executive officer. The four-member board of directors will also include guild President William Morrissey, UPI editor-in-chief Maxwell McCrohon and Ruhe.
"The mood is very optimistic," said Dave Wiessler, Washington bureau chief. "The agreement is a step in the right direction. Without this, the creditors would never have gone along."
"All we need is $17 million," Krasnow said. "Come on, Texas millionaires, where are you?"
Meanwhile, the Nashville Banner newspaper reported in yesterday afternoon's editions that under the agreement, what stock is left after converting the debt owed to creditors into equity tentatively will be divided among four groups. They will include UPI's 2,000 employes, who already own 6.5 percent of the company, UPI management, Foothill Capitol Corp., which is owed between 5 and 7 million, and Ruhe and Geissler.
[The Banner also said that Friday, Ruhe telephoned Australian publishing magnate Rupert Murdoch and asked that his News America Publishing Inc. buy the floundering wire service. According to a Banner source, Murdoch said he had too many ongoing ventures to staff and operate UPI properly and didn't know whether UPI could be saved. A spokesman for Murdoch confirmed that he had been approached and had turned UPI down.]