Fresh Loaf

Atlanta Magazine’s Steve Fennessy has another update on CL’s adventures in bankruptcy.

CL CEO Ben Eason asked the court handling the company’s case for permission to hire financial advisor Bryan Crino of Tampa-based Skyway Financial Partners. Eason proposes paying Crino $495 per hour, as well as a commission between $250,000 to $600,000.

This week, CL’s creditors asked the bankruptcy judge to reject Eason’s proposal.

Fennessy:

“[CL's largest creditor] balks at Skyway’s “lavish compensation,” which includes at least a $600,000 bonus if the company is sold. Atalaya also points out that Crino, as he himself admitted in court papers, owns an interest in an entity that owns shares in Creative Loafing. Hmm…. A conflict of interest? Atalaya thinks so, and says that Crino is far from a disinterested party.

As far as that $600,000 clause is concerned, Atalaya has more to say, asserting such a clause would “bind” Creative Loafing Inc. to exorbitant fees for services that the chain may not even need.

In what appears to be a not-so-subtle jab at Skyway, Atalaya mentions that Crino and company helped advise Eason on the purchase of the Chicago and D.C. papers last year. “Less than two years later, the value of the combined operations of the Debtors is less than the sales price for those two operations alone. It is currently unknown … whether the Debtors believe they may have claims against Skyway … relating to any prior advice.”

Fennessy, a former senior writer and news editor at CL, also reports that morale is low as the staff awaits further layoffs.

“We’ll probably continue to trim staff as it relates to market conditions,” Eason told Fennessy last week.

Neither Eason, who was in Atlanta this week, nor anyone else at the company, has addressed the staff about layoffs.

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Creative Loafing Inc. has asked a bankruptcy judge to allow it to pay $495 an hour to the investment banker who engineered last year’s purchase by CL of two other alternative weeklies, according to Atlanta Magazine’s Steve Fennessy. This time, Skyway Capital Partners’ Bryan Crino would be tasked with helping to solve the company’s financial woes.

Under the company’s Nov. 10 motion to the bankruptcy court, if Crino engineered a sale of Creative Loafing Inc., he and Tampa-based Skyway would be paid “whichever is greater—a cut of the sale or $600,000,” Fennessy wrote Friday on his Cityscape blog.

CL Inc. CEO Ben Eason told Fennessy in an interview that Creative Loafing Inc. — which filed Sept. 29 for Chapter 11 bankruptcy protection — isn’t for sale: “When you draft these agreements, you’re trying to think through any and all options that might come up.” But Eason does think Crino could help raise the money Eason needs to “recapitalize and recast” the company’s debt. For that, CL Inc. is proposing that Crino be paid at least $250,000.

Meanwhile, Eason said the company may suffer more layoffs. “We’ll probably continue to trim staff as it relates to market conditions,” he told Fennessy.

Creative Loafing/Atlanta is one of six alternative newsweeklies owned by Creative Loafing Inc. The others are Creative Loafing/Charlotte, Creative Loafing/Tampa, Creative Loafing/Sarasota, the Chicago Reader and Washington City Paper.

The Chicago and DC papers were purchased last July in the purchase that Crino helped orchestrate. Eason is battling the Atalaya investment fund, which lent CL Inc. $30 million as part of that deal, for control of the company.

The motion to has yet to be ruled upon by U.S. Bankruptcy Judge Caryl Delano.

Fennessy is a former news editor and senior writer for Creative Loafing/Atlanta.

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Former CL Senior Writer Steve Fennessy has a lengthy post on his Atlanta Magazine Cityscape blog about our recent Chapter 11 bankruptcy filing.

One of the most interesting bits:

[The filing] could also mean that [Creative Loafing Inc. CEO Ben] Eason has the company taken away from him. I asked if that possibility worried him. “It’s all speculative right now,” he said. “We’ve got 120 days to put a plan together. I think if we put a good plan together, I think the chances of me running the company are excellent.” (As it turns out, one of the major unsecured creditors to the company is Eason himself, who loaned the company $250,000.) Nor is Eason planning to sell the company. “That’s not something I want to do or something I’m interested in doing. As part of this filing, you have to think about what’s in the best interest for everybody. Right now, selling any one of the papers is not in our plans or something we think is in the best interest of the company.”

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Hollis was here.

So I’m telling the staff yesterday about our parent company filing for bankruptcy protection, and all of a sudden Hollis Gillespie is knocking frantically on the sliding glass door to the conference room.

She’s carrying a box full of MoonPies. Grant Henry aka Sister Louisa is behind her wearing a baseball cap with a picture of himself on it wearing a baseball cap with a picture of himself on it wearing a baseball cap with a picture of himself, and so on. He looks a bit embarrassed.

Hollis doesn’t look embarrassed at all. I sort of stare blankly at her and then back at the staff — to whom I’ve just unloaded the news from the corporate guys down in Tampa — and then back to her, beginning to shake my hea … no, now’s not the time … no … but she barges in anyway and says: “Hey, it’s been a great run. But I’m leaving you. I know you guys need the money, and I’m expensive, and I got the back page column at Atlanta Magazine. And, hey, anyway, I’ve got MoonPies.” Or something like that. (more…)

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This may sound odd for an organization that prides itself on the free flow of ideas, but staffers who are leaving Atlanta Journal-Constitution are being required to sign an agreement that they won’t “disparage” the paper or its management once they leave, according to several AJC employees.

“I was pretty surprised to see that in there,” said one reporter who’s viewed the agreement.

The AJC didn’t care to discuss the stipulation. “As standard practice, we don’t disclose any specifics regarding legal agreements we have with employees,” says spokeswoman Jennifer Morrow.

But one employee said the severance agreement being presented to employees this month bars those who sign it from making “any disparaging or untrue statements about the company,” its subsidiaries or any other employee. The source indicated that the quote was lifted from the actual agreement (I’d love to get my hands on a copy; please e-mail me if you’d like to share one).

An employee who left during last year’s buyout confirmed that similar phrasing was in the severance agreement he signed last year. That employee said the agreement caused some former writers and editors to refrain from discussing newsroom management in media coverage last year, specifically an Atlanta Magazine profile of Editor Julia Wallace by former CL writer Steve Fennessy.

(more…)

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The National Magazine Awards are usually not big news in Atlanta.

But today there is celebration at the Peachtree Street offices of Atlanta magazine after Executive Editor Paige Williams received an award for the Best Feature Story published last year.

Williams received the award for “You Have Thousands of Angels Around You,” which the judges described as a “stop-you-in-your-tracks tale of a teenager who survived a war, lost her entire family, fled two continents and wound up in Atlanta.”

To earn the award, Williams beat out writers from GQ, the New Yorker and Vanity Fair. The awards were announced last night at a black-tie gala in New York City.

(Full disclosure: I hung my hat at Atlanta magazine for several years.)

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Atlanta magazine’s Best of 2007 issue features a photo of a man devouring ribs that looks a lot like the photo of the man devouring ribs shot by Joeff Davis for CL’s Best Of issue.

Here’s Joeff Davis’ Sept. 26, 2007, photo of Kevin Rathbun inhaling ribs at Daddy D’z:

Here’s Atlanta magazine’s December 2007 photo of an unidentified carnivore at Fat Matt’s Rib Shack:

I’m prepared to accept that it’s a tragic coincidence. After all, sloppy binge-eating is as commonly Southern as humidity or bumper stickers depicting Calvin pissing on a Chevy logo.

But we’re nevertheless putting you on notice, Atlanta magazine.

If we see a photo of a panda at a strip joint in your pages anytime soon, expect a call from our attorney.

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The AJC’s loss is Atlanta magazine’s gain. They have hired Teresa Weaver, whose job as book editor was eliminated in the AJC’s restructuring and led to protests from the city’s literary community. Weaver starts her new job July 1. She’ll write a monthly books column, work with publishers on arranging book excerpts and other book-related features. She also will coordinate the books portion of the magazine’s annual Summer Reading Issue.

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