Follow the money: A trail of footnotes and government documents leads to Insider Louisville’s front door

By Jim Hopkins
Boulevard Publisher

In business journalism, some of the most interesting news shows up in fine-print footnotes in documents companies file with government agencies. Hospital and nursing giant Kindred Healthcare is great example. Last spring in a statement to stockholders, it disclosed two special payments to top executives: $6 million to then-executive vice chairman Paul Diaz in connection with his leaving the CEO’s job, and $250,000 to Chief Financial Officer Steven Farberto help him escape a high-profile dispute with a Glenview neighbor. But to uncover that, you had to follow three different footnotes on a table showing how much they got paid overall.

Insider Louisville logoThis leads me to another footnote, of sorts — one that appeared on a story today at Insider Louisville, the online news site launched in 2010, and to a document I’ve run across at the Securities and Exchange Commission. Together, they open a window on who’s investing in Louisville’s news media at a time when the once-dominant Courier-Journal has been losing influence amid steep staff cutbacks, shifting the balance of power in Kentucky’s biggest city. They underscore the importance of news outlets everywhere telling readers who’s behind the scenes, and about any conflicts of interest owners may pose for their publication. (I’ve got disclosures of my own.)

This morning, at the bottom of a long story about the Humana Foundation, Insider Louisville editors added this disclosure: “One of the five directors of the Humana Foundation is David A. Jones Jr., an investor of Insider Louisville.”

David A. Jones Jr.

Jones is one of Louisville’s more influential residents. He’s on the board of directors of Humana itself, and his father, David A. Jones Sr., is a co-founder of the insurance giant. Jones Jr. is a partner at Chrysalis Ventures, the Louisville venture-capital firm he founded in 1993, and he’s chairman of the elected seven-person board overseeing the Jefferson County Public Schools. (Here’s Chrysalis’s portfolio of company investments; it doesn’t show Insider Louisville, which suggests this was a personal investment.)

Tom Cottingham

To be sure, close readers of Insider Louisville have known Jones was an investor for several years. In August 2014, owner Tom Cottingham told readers he’d brought in three new minority investors he knew from a prior venture: Jones; Doug Cobb, the former Greater Louisville Inc. CEO, and Jon Pyles, now the site’s vice president of marketing. The story — which carried only a “staff” byline — didn’t say how much they’d invested, nor the exact size of their stake. Cottingham said he remained the majority holder.

Douglas Cobb

Now, though, an SEC document filed in April offers more clues about the publication’s investors, whom we learned this summer include a prominent heiress to the glittering Brown-Forman whiskey fortune. I can’t find any mention of the regulatory filing on Insider Louisville’s website, nor in any other media outlet in Louisville. My readers may well correct me after I publish this post; in any case, this is certainly the first time I’m writing about it.

The April 12 document shows that Insider Louisville LLC raised $975,000 from 12 investors in a $1.5 million stock offering that drew the first investment March 31. It didn’t identify the investors by name, however, and it didn’t say how big their stakes were. The first $450,000 was to pay down an undisclosed amount of debt, according to the document; anything left over would go to any of its directors: Jones, Cottingham, and a third named Jamie Wilson. (Who’s Wilson? I haven’t figured that out; maybe one of my readers knows.)

Minimum investment: $25K

The balance of the offering, $525,000, was still available when the document was filed, although for no more than a year. The minimum investment was $25,000, which means some of those 12 investors plunked down more; at the minimum, they would have only ponied up a combined $300,000.

The document is called a Form D, which companies use when they’re registering securities with the SEC, but with only limited information disclosed. For example, Insider Louisville declined to report its annual revenues, even within a range of dollar amounts. The site’s former owner, Terry Boyd, has said in the past that sales soared to more than $400,000 over just two years vs. a few hundred dollars in revenue per quarter in 2012. He founded the site in 2010 with $20,000 in seed funding from a small investor group, according to his Dispatches news site.

Dale Boden

Although the document doesn’t identify the 12 investors, an Insider Louisville story in June about Gov. Matt Bevin‘s new appointees to the University of Louisville board of trustees offered a possible clue. The story included another disclosure: “Dale Boden, Sandra Frazier and Doug Cobb are investors in Insider Louisville.”

Boden is CEO of B F Capital Inc., a Louisville-based private investment firm that primarily invests in real estate, venture capital and private-equity backed companies such as Insider Louisville. He’s also board chairman of Advanced Cancer Therapeutics, a biotechnology cancer drug company on East Market Street founded in 2007.

Sandra Frazier

Frazier is the Brown-Forman heiress, a member of the founding Brown family, and can well afford to make any number of investments. She owns 2.8 million voting shares after a recent stock split, according to the company’s June proxy statement to shareholders; they’re worth about $143 million, based on the current stock price. The family’s overall stake is worth more than $6 billion. Frazier also has a side interest in media: She’s CEO of Tandem Public Relations of Louisville.

And adding to the city’s overlapping power structure, Frazier and Humana co-founder Jones Sr. are both on the board of directors of Glenview Trust Co., the boutique investments firm serving more than 500 of the region’s wealthiest families, with a combined $6.5 billion in riches; here’s her bio there.

Cobb, it’s worth noting, ultimately walked away from the UofL board in a ruckus after it emerged he’d tweeted that climate change was a hoax; evolution was for patsies, and “gay Christian” was an oxymoron. And needless to say, the entire board has been in turmoil ever since Bevin made the surprise appointments.

Who are the rest of Insider Louisville’s 12 investors from last spring, and any others who haven’t been disclosed so far? Eagle-eyed readers may discover their identities over time, should any get mentioned in future stories there. To its credit, that’s because the site understands the value of being aboveboard.

What do you know? Use the comments section, below, or email me via jimhopkins[at]gmail[dot-com].

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