Rosie O'Donnell, publisher in court battle over demise of Rosie magazine

Thursday, October 30th 2003, 12:00 am

By: News On 6

NEW YORK (AP) _ Lawyers for Rosie O'Donnell and the publisher of her now-defunct magazine, Rosie, squared off in court Thursday, each charging the other with destroying the publication by seeking complete control.

``Ms. O'Donnell walked away from the magazine, causing it to shut down in its second year of publication and causing hundreds of people to lose jobs and Gruner + Jahr to lose millions of dollars,'' Martin Hyman, lawyer for publisher Gruner + Jahr USA, said in opening statements in a Manhattan courtroom.

The magazine, launched in 2001, folded soon after O'Donnell resigned in September 2002. G+J is seeking $100 million from O'Donnell; she asks $125 million in a countersuit.

O'Donnell, wearing a bright red coat over a black shirt and pants, listened attentively to opening arguments, but showed no reaction. She is expected to take the witness stand during the trial.

Hyman said the dispute began after a newly hired editor chose a cover photo of O'Donnell for the August 2002 edition that the entertainer deemed unflattering.

Hyman said the editor, Susan Toepfer, ignored O'Donnell's request to use another photo _ and O'Donnell saw that as a sign she was losing control of the magazine. From that moment on, he said, O'Donnell was determined that either Toepfer would go or she would.

In her opening statement, O'Donnell's lawyer Bonnie Scofield defended O'Donnell's decision to walk away from the magazine, saying the publisher breached an agreement that gave her control of the magazine's editorial content.

She agreed with Hyman that the disputed cover photo had upset O'Donnell, but that her client saw that as a sign that her wishes with regard to the magazine were not being respected. Scofield said O'Donnell found Toepfer difficult to work with and wanted the previous editor, Cathy Cazender, to return.

``She wanted things to return to the way they were when she was in control,'' Scofield said.

The trial is expected to feature differing accounts of O'Donnell's style as the editorial inspiration of Rosie, which subsumed the venerable, but failing magazine McCall's.

A key prong of the dispute is how the magazine reported its circulation numbers.

Lawyers for O'Donnell are expected to contend that G+J deliberately overstated its subscriber base to make the magazine appear healthier than it was. O'Donnell's contract allowed her to walk away from the magazine if it posted particularly high losses.

The trial comes as O'Donnell prepares to launch ``Taboo,'' a boisterous musical about the 1980s pop phenomenon Boy George _ and starring Boy George in a different role _ that O'Donnell has confidently predicted will win a Tony Award. She is the $10 million show's producer and single investor.