The ownership of Forbes Media is up in the air after its founding family accused two Asian investors of reneging on a deal to buy a majority stake in the business publishing empire.
The family, led by scion Steve Forbes, claims they are owed millions on the sale struck in the fall of 2014, and are suing to a force a liquidation of the investors’ Integrated Whale Media, whose sole holding is Forbes Media.
This means 98-year-old Forbes magazine, its Web site, conference business and related assets could end up back in play.
“Integrated Whale potentially faces being put into liquidation due to its failure to pay its debt to the Forbes plaintiffs,” according to one suit filed in the British Virgin Islands, where the holding company is based.
The Forbes family, which filed a parallel complaint in Delaware Chancery Court, claims the Hong Kong-based businessmen behind Integrated Whale — Tak Cheung Yam, head of investment firm Integrated Asset Management, and Wayne Hsieh, founder of Asustek Computer — are “typical deadbeat investors” who refuse to pay up.
Integrated Whale falsely claims that Timothy Forbes, the younger brother of Chairman Steve Forbes, had given it an oral waiver on overdue interest payments, the suit alleges.
“Not only was no waiver given, but Mr. [Timothy] Forbes delivered the exact opposite message at the meeting and demanded immediate payment of the overdue interest,” the suit claims.
Integrated Whale bought a 95 percent stake in the Forbes assets. While terms of the deal were not disclosed, the price paid valued the entire business at roughly $475 million, including debt, sources said.
Only an upfront payment was made by the two Asian businessmen said to be around $215 million, according to sources. They never paid another dime on the three promissory notes issued by the family, according to court papers.
As a consequence, the family, which kept a minority stake said to be around 5 percent, may reluctantly end back in full control of the media empire founded by B.C. Forbes in 1917.
Integrated Whale holds four of the seven seats on the Forbes Media board. Steve and Tim Forbes each hold a seat as does CEO Mike Perlis. Only three board meetings have been held since the deal was closed and Yak and Hsieh skipped them all.
The dispute involves warring members of the holding company, and not the operating company that continues to publish the magazines and Web site.
Despite the turmoil at the top, Perlis said in a memo to staffers that through Sept. 30 “overall revenue was up 13 percent due primarily to a growth in digital.”