MAXIM-UM SUIT

There’s more trouble brewing for Steve Rattner in his tenure as the owner of Maxim and Blender magazines.

Rattner, the head of private equity firm Quadrangle Capital Partners, runs the magazines via his Alpha Media Group – which now has a tit-for-tat legal fight to deal with just as the company’s battling a severe cash flow problem in one of the worst advertising markets in recent memory.

Alpha Media is already in talks with principal creditors about restructuring the company after it recently fell into technical default on its loan agreements.

Now a Dominican Republic resort operator is suing Alpha Media and its predecessor company, Dennis Publishing, claiming Maxim reneged on a deal to reflag its Sun Village Resorts under the Maxim name. The suit, filed by EMI Resorts on Nov. 26, is seeking $80 million in damages from the publisher for failing to provide advertising and editorial support in return for the rebranding.

It is actually a countersuit to one first filed by Alpha last month, in which the publisher claimed that EMI Resorts breached the terms of its licensing agreement. At the time of that suit, Alpha sought an injunction to block the resort owner from any use of the Maxim name.

EMI signed its agreement with Maxim in November 2006, when it was still owned by British publishing maverick Felix Dennis and run by his head of the American branch of Dennis Publishing, Steve Colvin.

Colvin is named as a defendant along with Barry Pincus, Vincent Partners and Edward Vincent.

Alpha, with backing from Rattner’s Quadrangle Group, took over the magazines from Dennis in August 2007 for $245 million.

The legal battle comes as Alpha faces an advertising shortfall that is keeping it from having enough cash flow to cover its banking covenants.

Kent Brownridge, a former top executive at Wenner Media, was brought on board as CEO at the time of the acquisition, with a minority investment in the company.

Although he was committed to agressively growing its branding and licensing agreements, he left suddenly in August 2008, and resurfaced only a few weeks later at OK!, owned by the British publisher Northern + Shell.

Separately, Rattner’s Quadrangle is winding down a hedge fund that had specialized in media investments.