Scripps Trust Files Pleading
Tue, August 26, 1997 by Rich Boehne
CINCINNATI, Ohio – Trustees of The Edward W. Scripps Trust have asked an Ohio probate court to approve their interpretation of the trust agreement’s language that requires the trust to "insure" its control of The E. W. Scripps Company.The trust currently holds 82 percent of The E. W. Scripps Company’s Common Voting Stock, which is not publicly traded, and 53 percent of its Class A Common Stock, which is traded on the New York Stock Exchange under the symbol "SSP."In a pleading filed today in Butler County, Ohio, where the trust was originally filed, the trustees asked Probate Judge Randy T. Rogers for a declaratory ruling that the trust agreement’s language only requires them to hold a majority of the outstanding Common Voting shares of the company, not a majority of outstanding Class A shares or the majority of the company’s total outstanding shares.Class A shareholders are entitled to elect the greater of three or one-third of the company’s directors but are not entitled to vote on any other matters except as required by Ohio law. Holders of Common Voting Stock are entitled to elect all remaining directors and to vote on all other matters.Since the company went public in 1988, the trust has gradually reduced its holdings of outstanding Class A Common Stock from approximately 77 percent to the current 53 percent. If the probate court affirms the trustees’ understanding of the agreement, the trust could further diversify its assets."The simple question of trust interpretation that we have put before the court is not who controls the company, but simply how the trust is to maintain its control as we work to fulfill the long term goals of the trust and the company," said Charles E. Scripps, chairman of the trustees and a grandson of the founder.Court approval also would make it easier for The E. W. Scripps Company to use Class A Common Stock as currency in acquisitions or mergers, where appropriate, even though the issuance of new shares could dilute the trust’s ownership of Class A Shares to below 50 percent."We fully support the trust in this effort to add the court’s approval and certainty to the meaning of the agreement’s language," said William R. Burleigh, president and chief executive officer of Scripps. "Our goal in this fast-changing media environment is to increase the size and value of the company while maintaining a commitment to quality. The freedom to use our stock gives us much more latitude when looking at opportunities."The pleading filed today notes that the trustees believe their interpretation of the agreement is not only in the best interests of the trust, its beneficiaries, the company and all shareholders, but also fully consistent with the intent and desires of Edward W. Scripps.In various documents and letters, including one written to a sibling in 1922, E. W. Scripps explained his plans to control the company through retention of less than a majority of its outstanding stock."In organizing The E. W. Scripps Company, I have only had one-fifth of the stock, voting stock," he wrote. "...by this method I can make room for an infinite number of stockholders..."This is the third time in the trust’s 75 year history that the trustees have asked the probate court to affirm their understanding of the agreement, which was established by E. W. Scripps to insure family control of the company. By its terms, the trust will terminate upon the death of the last survivor of four persons specified by the trust agreement, the youngest of whom is now 73 years of age. Upon the termination of the trust, more than 80 percent of the Common Voting Stock of the company will be subject to the terms of a Scripps Family Agreement entered into by those who will inherit the assets of the trust, other cousins and the company. The Family Agreement will restrict transfer and govern voting of Common Voting shares of the company held by family members.