Pulling Wires

In newspaper jargon, the money woes of United Press International are what is known as a running story. Stained by red ink for two decades, the nation's second-largest wire service (800 client newspapers and 3,300 broadcast stations, vs. 1,260 papers and 5,700 stations for the Associated Press) was sold to a group of investors in 1982 for $1. Despite wage and staff cutbacks, U.P.I. remained in delicate health; as payroll checks began bouncing in March, Owners Douglas Ruhe and William Geissler agreed to surrender most of their shares to the company's creditors and employees. Even that drastic move was not enough. U.P.I.'s four directors voted unanimously last week to authorize Chairman Luis Nogales to file for reorganization under Chapter 11 of the federal bankruptcy code.

U.P.I. officials quickly assured employees and clients alike that its newsgathering operations would not be curtailed. "U.P.I. is here and will be tomorrow," said Spokesman David Wickenden. "It's business as usual." Nogales is scheduled to file the bankruptcy petition this week, which would protect U.P.I. from its creditors while it puts its finances in order. Any plan then must be approved by a federal court. U.P.I. is expected to continue its efforts to persuade its major creditors (AT&T, American Express, RCA) to accept stock in return for forgiving about $17 million in debts.

The wire service's latest crisis came when Foothill Capital Corp., a Los Angeles-based finance company and U.P.I.'s principal lender, refused to advance the cash needed for last Friday's payroll. U.P.I. officials insisted that the Chapter 11 petition had been considered for "several months." Nonetheless, the wire service carried a story quoting unidentified sources who said that Foothill was unhappy with the Wire Service Guild's refusal to renegotiate a labor contract and make new wage concessions. One U.P.I. official said the California company was also upset to learn two weeks ago that U.P.I. had failed to pay the IRS $1.77 million in 1984 payroll taxes.

The company's 2,000 staffers, who had agreed to a 25% pay cut last August, seemed to be growing weary of the rubber checks. "I have a deep commitment to U.P.I., but I want to get paid," said Stephen Hagey, a Washington-based copy editor. Still, the spirit that kept the wires clacking through U.P.I.'s 78- year history is still in evidence. On a pillar in the Washington office hangs a sign: SURRENDER, HELL!