Abraham Polinsky's obituary from the Dec. 7, 1983, Duluth News Tribune & Herald:

A. B. Polinsky, a former Duluth business and community leader, died Nov. 29 in his home in San Diego. He was 84. 

Mr. Polinsky was born in Russia in 1898. He came to the United States around the turn on the century and eventually moved to Duluth, where he founded the Minnesota Woolen Co. with his brother, Nat.

The company manufactured men's and women's clothing for 61 years in Duluth, at one time employing up to 500 people. He sold his interet in the business to his brother and moved to San Diego in 1959.

In San Diego, Mr. Polinsky, his son, Charles, and son-in-law, Arthur L. Rivkin, bought the Coca-Cola Bottling Co. there. He served as president, then chairman of the board, from 1972 to 1982, when he retired.

Minnesota Woolen was one of the pioneers of mail-order sales. "We were the leading customer of the post office in Duluth, if not all Minnesota," said Henry Heller, who was in charge of operations for more than 30 years. 

Duluth friends and business associates remember Mr. Polinsky as an aggressive and generous man. "He was a very dynamic man, a business genius. He was also active in civic drives. Anything he put his efforts into, he put his whole heart into," Heller said.

"He was very sharp and ran an efficient organization. If anybody wasn't working up to par, he'd sure let them know about it," Heller said.

Heller said he last saw Mr. Polinsky several years ago. "He had mellowed a bit, but we always did get along anyway," Heller said.

Donald Wirtanen, accountant for the woolen company from 1946 to 1958, said, "He was tough as nails. We had our differences from time to time, but I learned the elements of business from him."

"He was a leader of men and women. Although he had only four or five grades of education, he was very articulate. He demanded a lot, but he got a lot out of people. He was a perfectionist."

"He always contributed something to the community and was very generous with the United Jewish Appeal," Wirtanen said.

During the height of the persecution of the Jews in Germany, Mr. Polinsky was a tenacious money raiser to help evacuate Jews from Germany and Austria. He also was a generous contributor to the cause, according to one of his old friends, Ben Overman. 

"He always said, 'In order to be a good solicitor, you have to be a good contributor.' He lived by that," Overman said. 

In San Diego, he was co-founder and the first president of the Greater San Diego Sports Association, an organization formed to bring major league sports to San Diego. 

He served on the Mayor's Charter Review Committee and was a member of the San Diego Chamber of Commerce, Al Bahr Temple of the Shrine and the Rotary Club. 

He was a strong financial backer of Sen. Henry Jackson of Washington and fellow Minnesotan Hubert H. Humphrey.

The Nat G. Polinsky Memorial Rehabilitation Center, 530 E. Second St., was named for his brother, who died in 1964.

He is survived by his wife, Jessie; a daughter, Jeannie Rivkin; a son, Charles; and three grandchildren, all of San Diego. Arrangements were by Merkley-Mitchell Funeral Home, San Diego.

From the July 29, 1994 Minneapolis Star Tribune:

Minnesota firm linked to Mafia, U.S. alleges 
Gaming business ties investigated
By Chris Ison and Lou Kilzer 
Staff Writers

A Minnesota company with major casino interests in Michigan, Louisiana and Mississippi has links to, and may be controlled by, an associate of New York's Genovese Mafia family, according to federal affidavits released Thursday.

A combined federal and state gambling task force raided the offices of International Gaming Management Inc. in St. Louis Park Thursday, using a search warrant that alleges racketeering, money laundering, securities fraud and other violations.

Agents also searched homes of some IGM officials, including the Deephaven home of CEO Douglas Polinsky, and the home of his father, Jerrold Polinsky, in Atlantic City, N.J. Agents think he controlled the company.

IGM, a publicly traded company, enriched the elder Polinsky and his alleged underworld "handler," Gary Danzo, an associate of the Genovese family, search warrant affidavits said.

IGM officials, whose offices are at 1550 Utica Ave. S., St. Louis Park, did not return phone calls Thursday.

The searches appear related to a recent Louisiana case that has attracted national attention.

In May, several alleged members of the Genovese and Gambino Mafia families of New York and the Marcello family of New Orleans were indicted in a case that alleges skimming from video gambling businesses. The indictments involved Worldwide Gaming, a video poker company that distributed machines throughout Louisiana, where they are legal in nightclubs, truck stops and racetracks.

Worldwide provided machines to a subsidiary of IGM called Louisiana Gaming Management, which became the biggest distributor of video gambling machines in that state. Agents have found other links between the Minnesota company and the alleged mob-infiltrated Worldwide Gaming, as well, search warrant affidavits said.

These and other recent cases involving possible Mafia links, including some in Minnesota, are likely to raise debate over rapid expansion of gambling on Indian reservations and elsewhere. They also raise questions about whether publicly traded companies are less likely to be infiltrated by mobsters, as some have suggested.

IGM, formed in 1987, at first supplied video gambling machines to Michigan Indian casinos. But in August 1991 it bought into Louisiana Gaming Management and began distributing video gambling devices throughout the Louisiana. IGM developed plans to build and operate three Mississippi casinos while buying a half-interest in an operating one, according to filings with the Securities and Exchange Commission.

IGM's foray into the hot Mississippi and Louisiana markets, where gambling is not confined to Indian reservations, was made possible in part by about $6.6 million in profits from its Indian operations and from private stock placements. Some of those placements seem to have directly benefited the elder Polinsky.

In one deal, Jerrold Polinsky allegedly received $65 million in IGM stock for selling the company some land he had bought for less than $1 million only months earlier. IGM also assumed his mortgage on the land.

Whether Polinsky actually made such a profit is not known. IGM's stock, which traded on the NASDAQ exchange as high as $11 a share a year ago, closed at $1.50 Thursday.

In addition to any stock proceeds, agents think that Jerrold Polinsky was receiving $10,000 a month in consulting fees and another $10,000 a month in installment payments for stock that IGM had repurchased from him.

Whatever the amount he made from IGM, it appears that he may not have shared his profits with the government. The affidavit said Polinsky told state gaming agents that he has not filed income tax returns since the early 1980s.

Another alleged beneficiary of IGM's business practices was Danzo, described as an "associate of the Genovese La Cosa Nostra organized-crime family," said an affidavit by Brendan Balen, an FBI organized-crime specialist. Danzo was indicted along with Ralph Gigante, the brother of the Genovese family boss, Vincent Gigante, in 1984 on a gambling charge. Danzo was convicted of a misdemeanor in that case. Another man indicted in that case was a Genovese associate who also was indicted in the Worldwide Gaming case in May.

Jerrold Polinsky gave 35,000 shares of IGM stock to Danzo in 1988 and 6,000 shares to Danzo's sister-in-law Linda Danzo, the affidavit said.

Polinsky also said in a New Jersey court that he owes 125,000 shares, then worth more than $1 million, to Danzo and seven others. But the affidavit said Danzo had more than an investor's passive role in IGM. Polinsky allegedly has testified in court that it was Danzo who introduced him to officers of Worldwide, the alleged mob front in New Orleans. Further, Danzo allegedly was to get a fee based on other business that Polinsky's company did with Worldwide.

And one secret government informant, referred to only as "T2," said Danzo was Polinsky's "handler." Agent Balen said in the affidavit that in underworld parlance, "an associate of an organized crime family who acts as a handler is responsible for directing the activities of another."

Also named in Thursday's affidavit, filed in U.S. District Court in Minneapolis, is Gary Polinsky, another of Jerrold's sons. Gary Polinsky allegedly transported slot machines illegally to New Mexico in 1993, an action that could threaten licenses that IGM has applied for to do business in Minnesota.

It wasn't the first time IGM allegedly transported machines illegally. IGM said that hundreds of machines were being transported from Nevada and Montana to Minnesota when, in fact, they were sent to Indian casinos in Michigan. Agents noted that the company's $6.6 million in profits could be forfeited because the machines were transported illegally.

How much money IGM will have on hand is unclear. IGM,which never has reported a profit, was flagged as a possible problem company by its auditors last year, according to documents filed with the SEC. Auditors warned that an accumulated $7 million deficit and continued losses "raise substantial doubt about the company's ability to continue as a going concern."

In its most recent annual report to the SEC, IGM said it had 653 gambling machines in operation in two Michigan Indian casinos. The company has done business with the Grand Traverse Band of Ottawa and Chippewa, the Keweenaw Bay Indian Community and the Sault Ste. Marie Tribe of Chippewa, all of Michigan.

It has proposed major casinos in Greenville, D'Iberville and Henderson Point, all in Mississippi. The company also has signed an agreement to acquire half interest in the Splash casino in Mhoon Landing, Miss., 35 miles south of Memphis, Tenn. None of those deals has been approved by Mississippi authorities. 

Minnesota gambling enforcement officials, who are participating in the IGM probe, have not ruled on IGM's state license application.

In addition to the Minnesota agents and the state attorney general's office, the gaming task force conducting the investigation includes the FBI, Internal Revenue Service, the inspector general's office of the U.S. Interior Department and U.S. Customs.

Among the alleged violations in Thursday's affidavit were mail and wire fraud, conspiracy, interstate transportation in aid of racketeering, securities fraud, illegal shipment of gambling devices, money laundering, tax evasion and obstructing and impeding the IRS. Search-warrant affidavits do not constitute formal charges, but list facts and allegations collected by law enforcement officials to justify a search.

Neither federal nor state officials would comment on the case.

And more recently we have the 2011 two-part story by TheStreetSweeper on Northern Oil and Gas, a company Douglas Polinsky reportedly helped found.

Part one: NOG: Lasting Fairy Tale or Looming Horror Story?
Part two: NOG: The Dirt-Filled Cracks in the Rags-to-Riches Story

Here are three segments pulled from that series:

NOG's non-executive founders (discreetly identified in an early corporate filing) look rather alarming, too. The first, Douglas M. Polinsky, previously served as CEO of a gambling-machine company that made headlines years ago because of its suspected ties to the Mob. (His father Jerrold Polinsky - portrayed as the secret force behind that company - later wound up in prison, the local St. Paul Pioneer-Press reported, for convictions on fraud and bribery charges.) The second, Joseph A. Geraci II, worked as a broker until the National Association of Securities Dealer slapped him with its harshest sanction possible -- a permanent ban from the industry -- because of the "egregious nature" of his activities and its efforts to "protect the public interest" from any future transgressions down the road.

In 2008, the year after NOG went public through the reverse-merger process favored by shady microcap players, Polinsky and Geraci dumped a combined $9 million worth of company stock - despite a so-called "lockup agreement" restricting insider sales - before quietly fading from the scene ahead of a damaging Barron's report that delivered a powerful hit to the company and its double-digit stock price. They never disappeared entirely, however, with both men since resurfacing as named defendants in a 2010 shareholder lawsuit against NOG insiders (including its current executives and their relatives) for alleged conflicts involving the creation of yet another energy company -- now known as Voyager Oil and Gas (AMEX: VOG) - that has supplied a fresh source of stock and the opportunity to repeat the lucrative NOG cycle all over again.

* * * 

For years, research indicates, NOG has carried more weight than some penny-stock companies while largely escaping the forces of gravity that often hammer those shares.

Even Barron's took a relatively light swing at NOG when covering the company's two non-executive founders. It merely identified Polinsky as the past CEO of International Gaming Management, for example, and noted that the company specialized in distributing gambling machines before its stock was ultimately delisted. It then vaguely mentioned that Polinsky's father wound up "charged with crimes," which sent him to prison for several years, but never shared any of the sensational details -- widely covered by the press earlier -- about IGM's suspected ties to the Mob.

"Officials are investigating IGM because of its alleged links to New York's Genovese crime family," The Commercial Appeal of Memphis reported in mid-1994. "A combined federal and state gambling task force raided the company's offices (and) also searched homes of some IGM executives, including Douglas Polinsky, the former chief executive officer, and his father Jerrold Polinsky ...

"IGM enriched the elder Polinsky and his alleged underworld 'handler,' Gary Danzo, an associate of the Genovese family, the search warrant affidavit states. (Moreover), the agents further accused the Polinskys of swindling shareholders in order to enrich themselves."

The elder Polinsky was convicted of bribery in 1997, the Saint Paul Pioneer Press later reported, and then convicted again on fraud and tax evasion charges the following year. He was ordered to serve three years in prison on the first conviction, the newspaper said, and roughly twice that amount on the second. (He was never charged in a bigger gambling case that nailed several mobsters linked to an IGM supplier, the newspaper noted, and consistently denied any Mafia ties to the end.)

Meanwhile, records indicate, Douglas Polinsky himself escaped criminal charges entirely. After bouncing back from that big scandal, corporate filings show, Polinsky joined forces with Geraci - harshly sanctioned by the NASD just a few years earlier - to help launch NOG and, like Geraci, go on to become a multimillionaire.

Polinsky and Geraci never responded to phone messages and email requests seeking input for this story.

* * *

In 2009, records show, Lantern Advisers -- a firm co-managed by Polinsky and Geraci -- helped VOG sell 3.4 million shares of stock at 85 cents a share in a private placement before it merged with a corporate shell (originally known as World Poker Tour) and became a Bakken oilfield stock. Great North Capital Consultants, the Polinsky-led firm mentioned in the shareholder lawsuit, then followed up by raising additional funds for VOG just a few months ahead of its official debut as a publicly traded energy company. Both firms collected valuable chunks of VOG stock for their services, records show, with Great North signaling plans to sell its entire stake -- for a quick return of roughly $1 million (based on the offering price) - in a registration statement filed just before the company began trading under its current name.

Polinsky and Geraci essentially hit the jackpot twice, with NOG first and VOG later, in records otherwise defined by losing bets on hapless penny stocks instead. 

For example, records show, the pair teamed up to launch a new gambling company - Poker Magic (OTC: POKR.OB) - the year before NOG hit the market. They actually assumed leadership roles in this particular case, records show, with Polinsky still serving as CEO and Geraci as CFO of the obscure poker company to this day. POKR has never traded above the $1 mark (and often fails to trade at all), records indicate, peaking last month at 90 cents before quickly plummeting to its current price of just 30 cents a share.>

Perhaps the best source for this post is a December 1978 Corporate Report article, which we will post here as a serial, because it is lengthy:

Jerry Polinsky Tries His Luck in Atlantic City
Considered 'insolvent' in Duluth, the former Minnesota Woolens executive is laying heavy bets along the Boardwalk ...
By Charles I. Mundale

In early summer 1977, a new hotel corporation was formed in Atlantic City, N.J.

In late summer 1977, an old retailing company bellied up in Duluth, Minn.

Regency Hotel Corp. had been formed to sell limited partnerships in a hotel-casino proposed for Atlantic City's burgeoning, newly legal gambling industry. Ultimate investment in the project, it was predicted, would be $45 million. Jerrold Polinsky was president.

Minnesota Woolens, Inc., had been founded in 1916 and had, in more than a half century of operations, extended its direct-sales activities over most of the country. When it folded, its debts totaled $5.6 million. Jerrold Polinsky was chairman of the board.

Basically, then, this is a story that asks the question, How can a man be broke in one state and a multimillion-dollar wheeler-dealer in another?

A conundrum? A paradox? An impossibility? So it would seem. Perhaps the question is not quite rightly put -- though many are asking it in just that way. Perhaps the question should read, How can Jerrold Polinsky be considered broke in Duluth and, at the same time, be taken seriously as a man of ways and means in Atlantic City?

An answer to that would at least seem possible and scarcely less interesting, so Corporate Report has tried to find it. In the process a great many related, fascinating and unexpected questions turned up?

Why did Minnesota Woolen, so long successful, go down the tube while its two major competitors, selling essentially the same kinds of merchandise with the same sales techniques, stayed alive and prosperous?

Was there a power struggle between Jerrold and his brother, Richard, over control of the company?

Were company funds drained away at the gambling tables in Las Vegas?

Why has Minnesota Woolens never filed bankruptcy?

Why didn't creditors force a bankruptcy?

Is $500,000 a fair price for Jerrold's share of the cable television company for which he secured franchises in Duluth and in Superior, Wis.?

Is Jerrold using his own funds in Atlantic City or is he only representing others? If there are others, who are they?

What is the nature of Jerrold's relationship with Robert Guccione of Penthouse magazine and Rocky Aoki of the Benihana of Tokyo restaurant chain?

Amidst these and other questions, Jerrold Polinsky remains a mystery, a man watched for and talked about but seldom seen. "If he's in town 20 minutes, I hear about it," remarked one ex-employee of Minnesota Woolens who now works in downtown Duluth. "People come in here and say, 'Guess who's in town' and I know who they mean." In Atlantic City, state and local officials, newspaper reporters and court officials all recognize the name of "the Minnesota businessman" who has been making news in their city for more than a year, but then they add, "I never saw the man."

Early last summer, Polinsky accepted phone calls from Corporate Report and promised cooperation "in a month" or "later," but in late August he said he had made arrangements to tell his story to another publishing firm -- Penthouse? -- and could say no more. A month later in Duluth, in his only -- and brief -- face-to-face conversation with Corporate Report, he said he did not want to talk. "Minnesota Woolens isn't news, and we're not going to talk to you," he declared, implying with the plural that he spoke for his brother, Richard, who was with him. "Where were you when things were going great? New Jersey is news," he continued, "but I'm under contract for a book, and I am not going to tell you anything."

That seemed clear enough. So we set out to find the answers on our own, realizing, of course, that no answer can be considered final until Jerrold Polinsky himself has responded.

Jerrold and Richard Polinsky took control of Minnesota Woolens in 1964. Three years earlier the company had effected a major expansion when it purchased a six-story building next to the five-story structure it had occupied for 27 years at 21 W. Superior St. in downtown Duluth. A gala grand opening had been staged in April 1962, and, in 1964, the firm had exhibited its wares at the New York World's Fair. The future looked promising, and it seemed to make good on those promises through the early '70s.

Under the brothers' leadership, the company's sales strategy was changed in two significant ways. The old door-to-door, one-on-one approach was replaced by the party method, and the crew of mostly full-time sales people was vastly enlarged by heavy recruitment of part-timers. The result was a huge increase in the number of persons being contacted by Minnesota Woolens representatives. By the end of the decade, more than 5,000 people were out there selling.

The party plan not only changed the nature of the sales force, however, it also changed the nature of the product line. According to a former company officer, the quality merchandise sold in the one-on-one situations gave way to a wider price range better suited to the party setting. "Seventy-five percent of our volume was women's clothes and stuff that women buy for men," the former employee explains.

In July of 1970, the company announced another expansion and moved into additional quarters at 737 E. Superior St. Jerrold, as chairman of the board, cited "substantial growth" in sales and sales personnel over the previous three years. Fourteen months later, the firm applied for a building permit for a new $200,000 manufacturing facility at 4219 W. Superior St. Jerrold and Richard revealed long-range plans for a $2.5-million complex in West Duluth that would put the company's four operating divisions under one roof. The 24,000-square-foot first phase opened in June 1972. A second phase, with $84,000 square feet and costing about $1 million, was scheduled for occupancy by November 1973. In May [print obscured here] Richard announced plans to remodel the company's retail store at 21 W. Superior St. and renamed it the Fashion Wagon.

That was the last of the good news.

Bad news to come ...

In March 1976, the company announced that MMC, Inc., a wholly owned manufacturing subsidiary, would be phased out. Thomas Miller, a senior vice president, explained that the factory, which had begun as a sewing operation in 1948, simply could not compete with it bigger rivals. Competition from the Orient was also a growing problem. Harry Dack, who, like Miller, was a longtime Minnesota Woolens employee, had been CEO at MMC and was to be reassigned with the company. 

The cutback constituted public acknowledgement of rumors that had been circulating in Duluth for many months. Minnesota Woolens was in trouble. It followed by only two months what one former sales representative terms a "terrible" national sales convention in Las Vegas, Nev. "Things had been bad before that," the ex-employee recalls, "but after that things went really bad."

The handwriting had been kept off the wall for about two years. A former company officer remembers the fall of 1973 as particularly disastrous. That was the fall of the Arab oil embargo, and what was supposed to be the year's peak selling period became, instead, a deep and unexpected valley. The faucet just shut off," the ex-insider relates, "and left us with a huge inventory. And a clothing inventory is about like an inventory of yesterday's newspapers."

There will be plenty more.

Jerrold and Richard Polinsky had cast themselves in essentially complementary roles at Minnesota Woolens. Jerrold was the merchandiser, responsible for selecting and acquiring the product lines and for publication of the company catalog. Richard was the marketing specialist and worked with the sales force. Jerrold was chairman of the board; Richard was president. Insiders report, however, that this formal, and seemingly neat, division of duties, masked a running disagreement over the affairs of the company. One person says Richard became deeply discouraged at one point. The company was doing badly, and he was going through a painful divorce. "For a while he didn't want any part of the business," the source recalls.

Jerrold assumed greater control, and serious efforts were made to get the company moving again. One former sales supervisor remembers one of those efforts: "We had a meeting with the executive [external] vice president and some internal vice presidents. They [the Polinskys] were being very honest at this particular meeting, and they asked at eight o'clock in the morning, "What's the matter?"

"I'm very frank about things, and I said, 'If you two would get over your sibling rivalry maybe we could get on with something,' and the shit hit the fan. ... It was a tremendous outburst. Jerry was noncommittal. Richard admitted that he was fighting his brother. After that it was all downhill."

It should be noted that the point at which "everything went downhill" shifts with the perspective of the observer. Similarly, the point at which the downhill slide seemed irreversible was different for different people. One former area supervisor says the onset of declining sales back in 1974 was warning enough, and that person left the company then, despite the 20 years invested. Another hung on into 1976 but left when "I was asked to take a 75-percent pay cut." Others hung on to the very end: "I really kept thinking it was going to be all right. Dick called me at 10:30 one night and said, 'We're finished.' And I was so upset, because the girl we were doing the party for the next night was one of my managers, and it meant a lot to her, because her husband was laid off at the time, and they had to have the money. How could I tell her? I said, 'Dick, how can that happen? You kept reassuring us.' He said, 'I know, but they locked us out today.' So that's when I called and got my other job."

However one perceives the downhill glide — its beginning or the speed of decent — it was indisputably a time of unremitting strain for the Polinsky brothers and their employees. Before it was "finished," Jerrold had turned most of his attention to other ventures, and Richard was once again absorbing the brunt of day-to-day battle. Jarrold, in fact, was to claim that his board chairmanship was "honorary" and insist that Minnesota Woolens was his brother's business.

The company applied for a $3 million low-interest loan from the Economic Development Association on grounds that its profitability had suffered from Taiwanese imports. Since the Polinsky family had been consistent contributors to the Democratic Farmer Labor Party, their plight and the loan application did not go unnoticed in the offices of Sen. Hubert H. Humphrey and Rep. James Oberstar of the Eighth District. As one insider to Duluth politics put it, "They were calling in their markers." The application was rejected, reviewed, rejected, re-reviewed and rejected a third time. Meanwhile, hopes were kept alive. During the final months, 10 suppliers brought suit for unpaid bills totaling hundreds of thousands of dollars. The First National Bank of Duluth was holding a secured note for $1.3 million.



The company's last gasp was a merchandise show for sales representatives in the summer of 1977. People were brought in at company expense. "They showed them a line that never was ... an invisible thing," claims a former supervisor, who suggests the event was staged to convince creditors there was still life in the organization.

Still plenty more to come.

After a nearly month-long break, we resume the Corporate Report story:

While the game called Minnesota Woolens, Inc. was over, others certainly were not. Individual lives, after all, had to go on, and, one by one, those who had worked for Minnesota Woolen found new jobs and reoriented their lives. A few stuck around to provide help and advice in the liquidation process. Richard and his second wife, whose father heads a company that was one of Minnesota Woolens' major suppliers — and creditors — went to work in the fall of 1977 for the Amway Co., another direct-sales firm, but informants are uncertain about the status of the Amway relationship now. Former company officials are unanimous in their assessment of Richard's sales ability. "He'd be a great asset to any company he worked for," says one. "Dick has a lot of charisma; he has personality," says another. Though it may serve him again in the future, personality has not protected him from the past. On November 21, Richard Polinsky filed personal bankruptcy in federal district court in Duluth.

Richard's deteriorating situation stands in dramatic—perhaps ironic—contrast to that of his brother. As already noted, Jerrold had developed other interests long before the failure of Minnesota Woolens. In fact, while the clothing firm was prospering in the late '60s, Jerrold was the central figure in extensive negotiations that finally resulted in cable television franchises in both Duluth (July 1968) and in Superior, Wis. (January 1971). For his efforts, Jerrold received 20 percent of the stock in Northeast Minnesota Cable Television Co. The remaining 80 percent was owned by H & B Communications Corp., which was acquired by Teleprompter Corp. of New York in September 1970.

That relationship is now embroiled in a complicated lawsuit in federal district court in Duluth. In the suit, Jerrold is demanding a judgment "in excess of $500,000," a price, he says, he and Teleprompter agreed upon for his 20 percent of the company. In a countersuit, Teleprompter claims that the stock subscription agreement between that company and Polinsky does not require a payment of $500,000 but rather an amount equal to three times the cash flow of Northeast Cable. (Northeast Cable submits a regular monthly accounting to the city of Duluth which collects five percent of the company's gross as a fee for the franchise. In 1978, receipts have been running about $34,000 a month.)

Among the documents filed in the suit are a set of interrogatories from Teleprompter and Polinsky's answers to them. The tenor of the questions strongly suggests that, among other things, Teleprompter may try to establish that $500,000 is too high a price for Polinsky's efforts. In his answers, Polinsky declares that he spent an average of 10 hours a week from the fall of 1967 through July 1968 on the Duluth franchise and an average of seven hours a week from February 1970 until January 1971 on the Superior franchise. 

In the case of the Superior franchise, Polinsky claims a "substantial expenditure of time" was "critical" to the company's ultimate success because of a "vigorous contest" waged by Superior attorney Toby E. Marcovich, who was representing another company. Marcovich told Corporate Report that the company he represented, a Los Angeles firm, was originally successful but "got into some kind of hassle and was unable to perform. It put us in a hell of an embarrassing position," he said.

In the Duluth franchise, Polinsky says, his "constant involvement" was crucial. "In particular," he states in answer to one of Teleprompter's questions, "the last-minute effort by Jeno Paulucci to delay or prevent the awarding of the franchise to Northeast was only overcome after particularly intensive lobbying efforts [by Polinsky]." Paulucci told Corporate Report he did look into the franchise potential in Duluth "but it was too late and they [Polinsky's company] got the jump on us." Other Duluthians involved at the time, however, do not remember any serious bid by Paulucci. Former Mayor Ben Boo does not recall it; Mel Cohen, a radio and television dealer, and Fran Befera, who heads a local television station, both made formal bids for the franchise and concede that Jeno may have been interested — "There must have been quite a few," Befera observed — but neither has any firm recollection of it. A search of city council minutes reveals no formal application or other inquiry from Paulucci.

Polinsky says he spent between $20,000 and $25,000 of his own funds on the franchise project before the franchises were awarded and an equal amount afterward.

The Teleprompter suit also involves two Duluth banks. Both the Northwestern Bank of Commerce and the First National Bank have filed counterclaims for money they loaned to Polinsky in exchange for his rights under the stock subscription agreement. According to the First National Bank, Polinsky used his rights to secure a $225,000 loan. Later, Polinsky used the same security to acquire $200,000 from Northwestern Bank of Commerce. Both banks say Polinsky told them he wanted the money to finance cable television franchise efforts in other areas.

Those franchise efforts had originally been pursued in behalf of the Teleprompter subsidiary. When Teleprompter decided in 1971 not to seek further franchises in Minneapolis, Polinsky went ahead on his own. He had filed an application in Bloomington for Teleprompter and ultimately secured a franchise in St. Louis Park in 1975 for his own Spectrum Communications Co. The franchise had originally been awarded to Warner Communications Co., but the firm "ran into difficulties," according to a St. Louis Park city official, and sold out to Polinsky. Polinsky later changed the name of his company to Jerrold Polinsky, Inc., and on Oct. 4, 1978, he sold the operation to Northern Cablevision, a subsidiary of the Miami, Fla.-based Storer Communications Co., which had just recently obtained the Bloomington franchise.

In its claim filed in the Teleprompter case, the Northwestern Bank of Commerce says it relied on Teleprompter to alert it to the earlier encumbrances and now brings its claim, because the note is in default "and upon information and belief that Polinsky is insolvent."

The bank's statement would raise few eyebrows in light of all that has happened to Minnesota Woolens, but it does seem more than a little anomalous — downright curious, in fact — in view of Jerrold's recent activities in Atlantic City, N.J. Here, then is the piece de resistance in this "very sad, sad story." A hometown bank considers Jerrold Polinsky "insolvent" and certainly fellow Duluthians wonder how — with his family business in ruins — he can be anything but broke. Yet, 2,000 miles away Jerrold Polinsky is a central figure in a multimillion-dollar deal.

Yes, yes, there's still plenty more to come.

I swear I'll get to the end of this story in the next 10 months or so.

Here is a Minnesota Woolen two-page ad spread from the Duluth News Tribune, Aug. 1, 1965. It also should be mentioned that a clip from the film mentioned in the first comment to this post landed on PDD last October.

 
1964 print ad featuring Gordon and Sheila MacRae.