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Bob Hawk sold his nest egg seven years ago for about a nickel on the dollar after an international telecommunications company stopped paying dividends on his stock.

It would have been easy just to write off the investment to the risk inherent in playing the markets.

The problem for Hawk, of Boone, and about 300 investors in Iowa and other states who invested in Metromedia International Group Inc. was that they couldn’t understand why an apparently profitable company in a growth market stopped paying a dividend not long after they purchased its stock in the late 1990s.

“It had paid a pretty good dividend,” Hawk said. “It was one of my main sources for retirement.”

Metromedia changed its name in January to MIG Inc. It filed for bankruptcy last month to thwart other investors, including its founder, from collecting more than $188 million that a Delaware state judge said was due holders of preferred stock after the company’s purchase in 2007 by a London-based private equity group.

MIG is putting together a reorganization plan while also appealing a ruling in early June in Delaware Chancery Court (a special state court that hears disputes over contracts and other business matters) that placed a higher value on the company’s preferred stock than the company claimed it was worth.

Though the bankruptcy case will have no impact on Hawk, it does provide a glimpse of the company’s complex nature and its holdings in the former Soviet republic of Georgia that include cable, telephone and Internet services.

Those are assets the company wants to avoid selling to pay off the state court settlement, a MIG lawyer told the Business Record. In a June 1 Business Record article, Greater Des Moines stockbroker Kevin McLaughlin said he led investors from Iowa and other states to the company on the belief that it had the potential to pay lucrative returns because it was involved in the expansion of telecommunications services into former Soviet bloc countries.

In addition, its main investors were billionaire John Kluge, who founded the company, and media mogul Rupert Murdoch. Kluge and one of his investment trusts are identified as creditors due $10.8 million in the MIG bankruptcy case.

McLaughlin will no longer talk about his eight-year quest to find answers to why the investment failed, with his investors alone losing between $3 million and $5 million. McLaughlin estimated that he lost about $300,000 on the investment.

The MIG bankruptcy filing and the Delaware court case that resulted in the ruling on the value of the stock shed some light on the history of the company, which dates to 1929, and its finances. MIG filed for bankruptcy to buy time to appeal the state court ruling.

MIG’s chief financial officer said in an affidavit filed in the bankruptcy case that though the company’s assets are valued at several times the amount of the state court judgment, they are largely illiquid and tied up in telecommunications companies located in countries that were part of the former Soviet Union, principally Georgia.

Subsequent financial statements filed with the bankruptcy court also indicate that MIG has continued to pay a six-figure settlement and severance package to its former financial officer, who is credited in court documents with returning the company to profitability from 2003 to the time it went private in 2007.

The filing also outlines a corporate history that involved the ownership of motion picture studios, lawn and garden equipment manufacturers, other media interests and the Eastern European telecommunications companies.

Murdoch’s News Corp. bought Kluge television outlets that eventually became part of the Fox television network.

Hawk said he and other investors were impressed with Metromedia’s pedigree. But over time, he became convinced that “they did all the tricks in the books.”

He retired as a purchasing agent in 2000, believing that the Metromedia investment would pad his retirement savings. But retirement became a pipe dream after the investment unraveled.

Hawk, 74, now works about 20 hours a week cleaning a Boone medical clinic. He was not aware that MIG had filed for bankruptcy, but at this point in his life, the company’s maneuverings make little difference.

“They’ll worm their way out of it,” he said.

Natasha Alexeeva, the company’s general counsel, said recently that neither Metromedia nor MIG has tried to finagle its way out of anything.

Metromedia was a complex operation that wasn’t always under the best management, she said. Although Hawk lost out on the investment, others made money when they bought the stock cheaply – at one point Metromedia’s common stock sold for 1 cent a share – and sold it in 2007 for $1.80.

Among the criticisms from McLaughlin and other investment advisers was that Metromedia did not file financial reports over a four-year period with the U.S. Securities and Exchange Commission (SEC).

The SEC had threatened to deregister Metromedia because of its failure to file the statements, but that effort became moot when the company was sold to private investors.

“It was a bad situation that we were trying to remedy,” Alexeeva said. “In a perfect world, we would have been better at the SEC reporting.”