ROANOKE TIMES

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, December 3, 1994                   TAG: 9412050051
SECTION: VIRGINIA                    PAGE: B4   EDITION: METRO 
SOURCE: RICHARD FOSTER STAFF WRITER
DATELINE:                                 LENGTH: Medium


200 IDLED AS DMC NEGOTIATES

Nearly 200 employees of Direct Mail Communications in Bedford County remained out of work Friday as the company's owners negotiated to settle three lawsuits involving former chief executive officer Daniel Reber.

Bill Boland, a Richmond lawyer, said the litigation was expected to be settled Friday, but no agreement had been reached by 4 p.m.

"I thought everyone was ready to sign," he said, "but that hasn't happened."

Boland represents Reber, who, along with Jimmy Thomas, started DMC in 1989. That pair sold the company in 1992 to Chuck Keith and Roger Ott, former marketing executives with The Washington Times.

Reber remained with DMC, which has grown into Bedford County's second-largest employer, until January 1994, when Keith and Ott, citing declining profits, dismissed him as CEO.

Reber then filed two lawsuits. One alleged that DMC had fired him in breach of an employment contract and another asked the court to dissolve the leasing company that owns the shopping center where DMC is located.

Ott and Keith fired back several months later with a $50 million federal lawsuit accusing Reber and Thomas of racketeering and securities fraud that had damaged DMC's profitability.

Keith vowed in an October interview that he and Ott wouldn't settle the lawsuits out of court unless they ran out of money to pay legal costs, which in September were $100,000.

While it's not certain that the two owners have run out of money, it's clear that DMC is suffering cash-flow shortages.

On Nov. 23, the company told workers not to return to work after the Thanksgiving holiday unless they were called and told to do so. In an interview Thursday, a top official with DMC said a skeleton crew "of less than 50 workers" was finishing up some old contracts.

Calls to the company Friday were answered by a recording as the rest of the workers, who earn about $6 an hour, remained out of work.

The layoffs aren't a complete surprise, considering DMC's helter-skelter financial history.

In the past two years, the company has gone from profits of $2.6 million to a loss of $300,000 last year. Keith said much of the company's money is tied up in paying off a $2 million loan used to buy new equipment. Creditors seeking more than $200,000 in unpaid bills have filed judgments against DMC.

Boland declined to discuss the settlement negotiations, saying only that Reber wasn't interested in buying back into the company and that negotiations had been going on for the last month.

Repeated calls to Keith at DMC and his home weren't returned Friday.



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