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Last week’s top posts: CL gets a new owner, the mayoral ‘machine’ malfunctions, and more!

Monday, August 31st, 2009

1. In the auction for Creative Loafing, the winning bidder is … (… these guys. Hey, they seem pretty OK!)

2. The mayoral ‘machine’ goes haywire, Reed fires back (Memo urges Atlanta’s black leaders to rally behind a single black mayoral candidate — to keep a white candidate out of office.)

3. Wendy Whitaker, symbol of flawed sex offender law, rearrested (When she was 17, Whitaker gave one of the most regrettable blow jobs ever.)

4. Sen. Jeff Chapman’s views on water conservation, water wars (Chapman’s one of the Gold Dome’s greatest enigmas — one of the few Republicans who doesn’t march in lockstep with his fellow pachyderms.)

5. Oxendine: Build an interstate through East Atlanta? Let’s talk! (Um, no.)

(Photo by Joeff Davis)

Last week’s top posts: Soccer, BMF, Jay-Z, Best of Atlanta and armageddon

Monday, July 27th, 2009

1. AC Milan v. Club America (Who knows when Atlanta will get to witness such quality soccer — or such HORRIFIC traffic jams — again. Actually, there’s probably a traffic jam planned for about 15 minutes from now.)

2. BMF member arrested, Jay-Z’s ‘Death of Autotune’ gives nod to the crew (Two milestones for the infamous Black Mafia Family.)

3. Fun CL bankruptcy news! (Wednesday will be a pivotal day for the future of Creative Loafing. Stay tuned.)

4. Filthy Rich: Best of Atlanta 2009 ballot (You only have until this Friday to cast your votes for CL’s 2009 Best of Atlanta issue. After that, the opportunity will be lost forever.)

5. Atlanta at $20 per gallon of gas (A vision of armageddon.)

(Photo by Alejandro Leal)

Bankruptcy judge sets auction date for ownership of Creative Loafing alt-weekly chain

Monday, July 13th, 2009

Our colleague Wayne Garcia at CL’s sister paper in Tampa reports:

And it will be on Aug. 25, during a hearing in downtown Tampa that will start at 10 a.m. Federal Bankruptcy Judge Caryl E. Delano today approved a disclosure statement for Creative Loafing’s reorganization plan after a week of intensive talks between the chain’s owners, in the form of company CEO Ben Eason, and its largest creditor, Atalaya Capital Management LP.

Atalaya is the investment fund that was owed $31 million from financing CL’s 2007 pay-down of debt and purchase of the Chicago Reader and Washington City Paper. As part of the negotiations, Atalaya has agreed to write-down its promissory note to $12 million, which would be repaid at 8 percent interest-only for five years and balloon due at that point.

According to the terms of the reorganization plan and promises made in court today, all CL creditors would be paid in full with two exceptions: Atalaya and BIA Digital Partners, which provided additional lending in the 2007 deals. BIA is now part of an Eason-led equity group that will bid for ownership against Atalaya.

“We are on board and supportive of moving forward under this process,” Atalaya’s lawyer, Tyler Brown, told the judge via telephone during the noon hearing.

That means that Atalaya is supporting the reorganization plan and auction process. It remains, however, interested in owning the nation’s second-largest [alternative] newspaper chain and has put in what is called a “stalking horse offer” of $2 million that will be the first bid up during the Aug. 25 equity auction, at which anybody can essentially bid to own the post-bankruptcy Creative Loafing.

Continue reading “Bankruptcy judge sets auction date for ownership of Creative Loafing alt-weekly chain” …

AP: Bankruptcy rate higher where wages are seized

Monday, July 6th, 2009

Georgia’s personal bankruptcy rate is roughly four times higher than neighboring South Carolina’s.

Are Georgians really four-times as unable to pay their debts as South Carolinians?

Nope. It turns out laws allowing creditors to garnish the wages of debtors have much higher rates bankruptcy than states that protect wages from creditors.

So spoketh the AP:

[T]he five states that prohibit or strongly limit wage seizures — North Carolina, Pennsylvania, South Carolina, Florida and Texas — all have drastically lower rates than their neighbors, with particularly striking differences along borders, where economic conditions are similar but bankruptcy rates are not.

South Carolina’s bankruptcy rate is almost one-quarter that of Georgia’s; Pennsylvania has half the rate of Ohio; North Carolina has about one-third the rate of Tennessee; Texas has a smaller rate than all its neighbors; and Florida has just about half the rates of Georgia and Alabama.

CL bankruptcy judge to review arguments, deliver ruling later

Wednesday, March 18th, 2009

Wayne Garcia, political editor of CL’s Tampa paper, writes that the judge in the company’s bankruptcy court case has asked the sides to deliver closing arguments in writing. She will review the details and deliver a decision in an as-yet unscheduled conference call.

Don’t wait up for a decision in our Tampa bankruptcy court hearing today; Judge Caryl Delano said early this evening that she did not plan on ruling immediately on whether lender Atalaya Capital Management should be allowed to declare Creative Loafing in default of its $31 million in loans and take over the alt-weekly chain.

Testimony was continuing into the evening in the hearing. Creative Loafing’s valuation expert, Michael Mard of Tampa’s Financial Valuation Group of Florida, testified through all of Tuesday afternoon about his assessment that the chain absorbed most of its losses and revenue declines before its Sept. 29, 2008, Chapter 11 bankruptcy filing. He put the value of the company at $7 million on Sept. 30; $12 million on Dec. 31, 2008; and $13 million by February of this year.

Read the rest of Garcia’s update here.

CL CEO testifies in bankruptcy court

Friday, March 13th, 2009

Here’s the latest dispatch our colleague in Tampa, Wayne Garcia, about Creative Loafing Inc. CEO Ben Eason’s attempt to retain control of his six-newspaper company. The case continues next Tuesday in Florida bankruptcy court.

Ben Eason

Ben Eason

It was A Tale of Two Media Companies as Creative Loafing CEO and President Ben Eason testified Thursday afternoon during a hearing to determine whether he keeps ownership of the alt-newspaper chain.

Or perhaps I should write, ownership of the alt-digital media company. Much of Eason’s testimony concerned the collapse of the print news publishing economic model starting in 2005 and accelerating with the advent of the current recession in mid-2008. Under direct examination from CL’s bankruptcy lawyer David Jennis, Eason detailed how the company responded to 20 percent decreases in advertising revenues that he says company officials started seeing in July 2008.

“There’s been significant changes in our business…” Eason said in what qualified as the understatement of the day.

Continue reading “CL CEO testifies in bankruptcy court” …

Creative Loafing Inc. bankruptcy hearing continues, CEO testifies today

Thursday, March 12th, 2009

Our Tampa colleague, Wayne Garcia, is closely following Creative Loafing’s court appearance today in Florida, during which the company’s CEO is arguing to maintain ownership of his six newspapers. Here’s Garcia’s second post from yesterday’s proceedings:

From an afternoon of Ph.D.- or MBA-level financial testimony, here’s the bottom line in the hearing for control of the Creative Loafing chain of alternative weekly newspapers:

– Lender Atalaya Capital concluded its case with testimony from Deloitte valuation expert Stamos Nicholas, who went through a detailed report he produced that concludes Creative Loafing’s value as a company dropped from $19 million on Sept. 30, 2008 — a day after it filed for Chapter 11 bankruptcy protection — to $11.4 million by Dec. 31, 2008. Nicholas blamed falling revenues and operating margins at the chain, as well as a general economic collapse in the wider economy.

CL’s attorney Tim Andreu challenged Nicholas’ report on cross-examination, pointing out that Nicholas did not speak with the chain’s management to learn more details about the financial assumptions he used for his valuation.

(more…)

CL bankruptcy case in court today

Wednesday, March 11th, 2009

Our Tampa colleague, Wayne Garcia, is closely following Creative Loafing’s court appearance today in Florida, during which the company’s CEO is arguing to maintain ownership of his six newspapers. Here’s Garcia’s first post of the day:

The Creative Loafing chain is in a Tampa bankruptcy court hearing today as owner Ben Eason tries to fend off his biggest creditor, which wants to take ownership of the chain and says it has “lost confidence” in Eason’s management.

Atalaya Capital Management LP, an investment fund that is owed $31 million from financing CL’s 2007 pay-down of debt and purchase of the Chicago Reader and Washington City Paper, said in court this morning that it would continue to operate the newspaper chain “as a going concern” and put more dollars into it rather than get rid of it in a fire sale.

Atalaya partner Michael Bogdan testified that the firm has hired another investment banking firm with media experience, Bulkley Capital of Dallas, Texas (with an office in Atlanta, the home of CL’s largest newspaper) to advise it and provide “management assistance” in running the CL papers if it is successful in court today. That firm’s founder, Brad Bulkley, has strong media experience, Bodgan said. Bulkley’s website describes it this way:

Continue reading “CL bankruptcy case in court today” …

Creative Loafing bankruptcy update: hearing today is stalemate

Wednesday, January 21st, 2009

By Wayne Garcia

Creative Loafing Inc. CEO Ben Eason appeared in federal bankruptcy court in Tampa today in the company’s continuing Chapter 11 case.

It was supposed to be a day-long hearing culminating in a decision from Judge Caryl E. Delano as to whether to allow Eason’s biggest creditors — Atalaya Administrative LLC and Atalaya Funding II LP, which loaned more than $30 million to Creative Loafing two years ago to finance the purchase of the Washington City Paper and Chicago Reader — to declare the company’s loans in default and take immediate ownership of the alt-weekly chain.

But that didn’t happen.

Without going into lots of technical bankruptcy law and financial valuation methodology, I’ll just report that testimony in the hearing didn’t go off as planned and has been continued until March 11. Both sides, while complaining of the effect of the delays, worked together during an hour-long recess to reconfigure the Chapter 11 timeline for the case.

Eason’s attorney argued that every day the ownership issue isn’t settled makes it harder to find new equity partners and reorganize the company; Atalaya’s lawyer argued that the value of its collateral continues to decline and is losing the hedge fund millions

Two more hearings, to determine the value of the company and approve part of the reorganization plan, are scheduled for late March and early April.

Add it up: Annus not totally horribilis

Tuesday, December 30th, 2008

Number of people who died jumping from metro Atlanta highway overpasses in 2008: 1

Number of buses to plunge off a highway overpass: 0

Number of people who threatened to jump from metro Atlanta construction cranes over this past year: 0

3344 Peachtree

3344 Peachtree

Number of new Atlanta skyscrapers under construction or completed in the last 12 months: 11

Of all regional banks that failed in 2008, percentage based in Georgia: 20

Number of major banks headquartered in Atlanta when 2008 began: 1

Number of major banks still headquartered in Atlanta as 2008 ends: 1

Number of Atlanta-based Fortune 500 companies that went bankrupt in 2008: 0

Hartsfield-Jackson’s 2007 ranking among major U.S. airports for flight delays: 7

Hartsfield-Jackson’s 2008 ranking among major U.S. airports for flight delays: 9

Sources: Atlanta Journal-Constitution, Emporis, Bureau of Transportation Statistics

NYTimes: New Jersey altweekly flourishes…in print

Wednesday, December 24th, 2008

New York Times media columnist David Carr had an eye-opening article yesterday about TriCityNews, an Asbury Park, N.J. altweekly with a circulation of 10,000, a skeleton-crew staff, and an enviable profit margin at a time when newspapers — and magazines, as well — are seeing layoffs, dwindling revenues and bankruptcies. (Carr mentions Creative Loafing Inc. in the article.)

How’d Dan Jacobson, the paper’s publisher and owner, do it? In what would seem a suicidal move, he invested his energy and focus into the print “product” and saw it become an item readers clamored to pick up.  He set advertising rates 10 years ago and maintained them, and in the process, developed a loyal list of clients. Most importantly, he says, he ignored the publishing pack’s rush to gain an online presence and completely ignored the web. (Look at the paper’s website.) It appears — in this case, at least — there’s something to be said about safeguarding your content.

(more…)

Creative Loafing CEO wins more time

Thursday, December 18th, 2008
Ben Eason

Ben Eason

Wayne Garcia, our colleague at CL’s Tampa paper, attended today’s hearing about Creative Loafing Inc.’s bankruptcy protection proceedings.

Garcia reports:

Current Creative Loafing CEO and Chairman Ben Eason won a partial victory in federal bankruptcy court in Tampa today as Judge Caryl E. Delano refused to grant a motion by lender Atalaya to give it ownership of the company.

At a preliminary hearing this afternoon, Delano ruled that Creative Loafing’s reorganization plan should move forward and that it is too early to say that it can’t work. If it were nine months or more into the bankruptcy, Delano said from the bench, such a motion would be worth pursuing. “We’re three months into the case. I think the debtor should be provided a reasonable opportunity…. This case has been on a short string,” Delano told the parties in court. “The debtor has complied with those timetables” in producing a preliminary reorganization plan.

Garcia reports the judge scheduled an evidentiary hearing for Jan. 21. A hearing to review the proposed reorganization plan has also been scheduled for Jan. 26. Read more at Garcia’s blog.

(Photo by Jim Stawniak)

Tribune news company bankrupt

Monday, December 8th, 2008

This is big.

The Tribune Co. is the country’s second-largest publisher of newspapers behind Gannett. (And following the break-up of Knight-Ridder.) The company owns some of the most venerated brand names in print journalism: the Chicago Tribune, Los Angeles Times, Baltimore Sun, Hartford Courant and Orlando Sentinel.

Like Atlanta-based Cox Enterprises, Tribune is heavily invested in broadcasting, with two dozens TV and radio stations across the country. But it also owns plenty of other things most publishing companies don’t mess with, such as a sport franchise (Chicago Cubs), a ball park (Wrigley Field) and a cable sports network.

This afternoon, the NYT reports that Tribune filed for Chapter 11 bankruptcy protection.

Rival publisher offers $1 million for CL

Wednesday, November 26th, 2008

Patrick Best's wallet

Patrick Best, a former CL ad director and publisher of The Sunday Paper, has publicly offered to buy Creative Loafing for $1 million.

I assumed Best’s offer was a joke, until I located this video footage, recorded during a recent Sunday Paper staff meeting.

Further research has also unearthed evidence suggesting Best has made a similar purchase attempt on at least one previous occasion.

Atlanta blogs today

Monday, November 24th, 2008

— No paper likes to generate its own news, but CL did that this morning when longtime editor-in-chief Ken Edelstein was fired. Edelstein was the editor for 10 years. At his Cityscape blog, Steve Fennessy says Edelstein was let go after he protested additional cuts to “an already decimated editorial staff.” The loss of Edelstein is certainly a blow to Atlanta journalism, while CL owner Ben Eason struggles to bring his publishing empire out of bankruptcy. Former CL senior editor John Sugg also weighs in to Fennessy on what this says about the paper’s management and its future.

— There was also a major blow at the Weather Channel from their new bosses at NBC — as the struggling network was promoting its “Green Week,” the corporate beancounters fired the entire environmental unit at the Weather Channel. As pitiful a state as print journalism is in, television news is hurting as well. At Live Apartment Fire, Doug laments the death of whimsy, the kind of reports that Leroy Powell used to do so well. Stories that had no real news peg, but simply invite viewers see the world from a different perspective. And even when there is the occasional stab at it, such as WAGA’s piece on city dwellers who raise chickens in their backyard, it’s so “serious” that it’s no longer interesting.

— Speaking of inner-city chickens, the fine ladies at Peccane Log note that they used to see chicken bones up and down DeKalb Ave. as they walked their dog. Now, the bones have disappeared and all they see are discarded lottery slips. It appears that people have traded eating chicken wings for a wing-and-a-prayer lottery ticket. Another sign of the times?

— There are too many harsher reminders. At Politits, DCup writes very openly and movingly about walking the financial razor’s edge. Last week, her family filed for bankruptcy protection, and one of her initial emotions was a feeling of shame. That’s OK; the ones you have to worry about are the ones who feel no remorse. Let’s hope “the one” can turn around the economy once he takes office and stop the bleeding.

— And what of the legacy of the fellow in office right now? In his “My Morning Wooten,” DriftGrift gives wider context to a couple of more absurd claims proffered by the AJC’s resident conservative columnist. And says he can’t wait until Wooten attempts to define W’s legacy in positive terms. Perhaps it’s telling that Wooten hasn’t made a stab at that yet.

— Let’s not forget that we have a Senate run-off coming down to the wire. The Big Sax Machine had some heavy-hitters come into the state over the weekend and Andre at Georgia Politics Unfiltered has some of their fear quotes for our enjoyment. Doesn’t anyone discuss their own vision of the future these days? Or is it that they don’t have a vision, thus the fear tactics?

— And, finally, Dave at Rather Than Working gears up for the media’s obsession with all things Obama once he takes office. Like where Obama’s kids are going to school. But he leaves unanswered one burning question: which President served hot dogs to British royalty who visited the White House? Does anyone know?

It’s the end of the world — have a great weekend!

Friday, November 21st, 2008

So I’m talking to this bankruptcy expert for an upcoming story, and I ask him if he has any tips he’d like to share for protecting your finances during these tough times.

Here’s what he had to say:

If you didn’t position yourself before now, you’re not in very good shape to survive this. Now is too late. If you had a retirement plan or savings or investments in Wall Street, it needed to be balanced and it needed to be conservative. Sure, you’d take a hit — but not as a bad a hit as you did if you had everything invested in Citibank stock.

Hold on for dear life. I feel like the sky is falling and we all need to run and get out of the way. This is a very, very, very bad situation. We’re in a death spiral, and I’m not sure if anybody’s going to be able to pull us out soon.

Lawsuit against mayor’s daughter settled

Wednesday, November 19th, 2008

A lawsuit against Kai Franklin Graham, who was supposed to go on trial Monday in federal bankruptcy court, has been settled, according to documents filed today in federal bankruptcy court.

Free At Last Bail Bonds had sued Graham in late 2005 to recover $185,000 the company lost after her then-husband, major cocaine trafficker Tremayne “Kiki” Graham, cut his ankle monitor and went on the run. Kai Franklin Graham, the daughter of Atlanta Mayor Shirley Franklin, had filed for bankruptcy in early 2005 to avoid having to repay the bond.

According to court documents, Free At Last settled for a fraction of what it sought — just $6,000.

As of last month, it had appeared all but certain that the case would go to trial. “We’ve talked about [a settlement] many times,” Cameron McCord, an attorney for Free At Last Bail Bonds, said during an October hearing. “I just think we’re too far apart.”

Free At Last had claimed Graham misled authorities about her financial situation and her knowledge of her then-husband’s whereabouts, and therefore shouldn’t be allowed to receive bankruptcy protection.

Was lawsuit against mayor’s daughter settled?

Tuesday, November 18th, 2008

UPDATE: Case settled.

A lawsuit against Kai Franklin Graham, who was supposed to go on trial yesterday in federal bankruptcy court, might have been resolved.

Free At Last Bail Bonds sued Graham in 2005 to recover $185,000 the company lost after her then-husband, major cocaine trafficker Tremayne “Kiki” Graham, cut his ankle monitor and went on the run. Kai Franklin Graham, the daughter of Atlanta Mayor Shirley Franklin, filed for bankruptcy to avoid having to repay his bond.

In court documents, Free At Last has claimed Graham misled authorities about her financial situation and her knowledge of her then-husband’s whereabouts, and therefore shouldn’t be allowed to receive bankruptcy protection.

The most recent hearing and filings in the lawsuit indicated that the case couldn’t be resolved.

“We’ve talked about [a settlement] many times,” Cameron McCord, an attorney for Free At Last Bail Bonds, said during a hearing last month. “I just think we’re too far apart.”

But considering that the trial didn’t start as scheduled — and that no new date has been set — it’s likely that Free At Last and Graham reached some sort of agreement.

“The only other possibility is that the matter was settled,” says bankruptcy attorney Howard Rothbloom, who is not involved in the case. He adds that if the lawsuit did in fact settle, it might take several days for the settlement to show up in the court file. “Ultimately, there has to be something on the docket.”

Attorneys for Graham and Free At Last did not return phone calls.

No trial, at least today, for mayor’s daughter

Monday, November 17th, 2008

UPDATE: Case settled.

Mayor Shirley Franklin’s daughter Kai Franklin Graham, who is being sued in federal bankruptcy court by the bonding company that bailed out her then-husband in 2004, was supposed to go on trial this morning. But when I showed up at the courtroom, it was empty and dark.

A call to the judge’s chambers didn’t help. The assistant who answered the phone said she couldn’t give me any information, other than, “There is no court today.” Kinda weird, huh?

(more…)

Lawsuit: Mayor Shirley Franklin’s daughter lied about finances

Tuesday, October 14th, 2008

UPDATE: Case settled.

When Kai Franklin Graham, daughter of Atlanta Mayor Shirley Franklin, goes on trial next month on civil charges, the case could shed light on allegations that a recent criminal investigation only hinted at.

The plaintiff, Free At Last Bail Bonds, is suing Graham in an attempt to hold her accountable for $185,000 she owes the company after her then-husband jumped bond and became a fugitive. Kai Franklin Graham filed for bankruptcy in 2005 in an attempt to avoid paying the bond.

The reason she shouldn’t be allowed to use the federal bankruptcy statute to free herself from the debt? According to Free At Last, Graham deceived both the bondsman and the bankruptcy court about her financial situation and the whereabouts of Tremayne “Kiki” Graham, whom she divorced the year after he went on the lam.

Documents filed in the case allege that Kai Franklin Graham “blatantly lied under oath” and tried to hide contentious sources of income.

In court documents, Graham’s attorney, James Dearing, denied Free At Last’s allegations. Dearing didn’t return CL’s phone calls seeking comment.

Continue reading here

Atlanta blogs today

Thursday, October 2nd, 2008

— As the big debate approaches, is Sarah Palin a sign the apocalypse is upon us? Over at Politits, Dcup wonders how Johnny Mac feels when his running mate is more popular than he is.

— Seeing the latest Katie Couric interview is disturbing. And the lovely Sara at Going Through The Motions makes the case that she’s the more qualified “Sara” to be vice-president because she can actually name some rather well-known Supreme Court cases. Maybe the other Sarah should click through to the list, just to bone up on our country’s history.

— And who wants to bet that the magazines she wouldn’t admit to reading include the National Enquirer and US Weekly? Based on Palin’s lack of reading material, ATLmalcontent hopes that it all turns out to be a bad dream come January.

— Ms. Palin professes to have a gay friend, although his/her identity remains a mystery. But J-Mac did agree to give an interview to a gay magazine, although he dictated that the questions and answers be written out. Can’t ever be too careful, right Mr. “Straight Talk” Express? At Reporter-Cub, there’s links and some analysis.

— As Driftgrift notes, Cynthia McKinney is running for president. No, I’m not kidding. Really and truly. For the Green Party. And based on the video Driftgrift dug up, either it’s the end of the world as we know it or else Cynthia has turned completely psychotic. Dig those bugged-out eyes.

– Going local, Righteous Jackass ponders Karen Handel, who used op-ed space in the AJC to make a vow to protect the integrity of the November elections and yet fights to limit the number of people who actually can vote. It’s the idea of the elite democracy, he says, where only a few are smart enough to lead the rest of us.

— And, finally, going even more local, the fine ladies at Pecanne Log discuss CL’s bankruptcy and stake out their vision for what the paper should be in the future.

Atlanta Magazine’s insight on CL’s bankruptcy

Wednesday, October 1st, 2008

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.”

World responds to CL bankruptcy protection

Monday, September 29th, 2008

Well, maybe “world” is a bit of an exaggeration. But the New York media have chimed in!

Jerry Portwood, editor of New York Press and CL’s former assistant A&E editor, had this to say about our parent company filing for Chapter 11:

I once worked at Creative Loafing in Atlanta but left long before I had to witness its diminishing editorial or advertising power in the region.

Ouch.

Gawker.com, of all unlikely sources of commiseration, was more empathetic:

This may be just a foreshadowing of some painful days to come for alt-weeklies in general—we also hear the Village Voice may be on the verge of some layoffs.

The New York Observer took the silver-lining angle in response to news of the bankruptcy relief sought by Creative Loafing Inc., which also owns the Chicago Reader, Washington City Paper, and Creative Loafings in Charlotte, Tampa and Sarasota:

According to [City Paper Editor Erik] Wemple, it’s really not that big a deal—in fact, it might be a good thing—since, according to Creative Loafing C.E.O., Ben Eason (whom Mr. Wemple paraphrases), the fiing “would allow the six papers in the Creative Loafing portfolio to establish a greater online presence while the company reorganizes its operations.”

Creative Loafing files for bankruptcy protection

Monday, September 29th, 2008

Creative Loafing Inc. — which owns alternative weekly newspapers in Chicago, Washington, Tampa, Charlotte and Sarasota, as well as Atlanta — today filed for bankruptcy protection. Prompting the move was a debt load of more than $40 million.
“The company owned owed more money than it can pay back right now,” CEO Ben Eason said in a conference call with company managers. The bankruptcy petition was filed in Tampa, where the company’s based, and was timed to preclude an interest payment that was owed lenders on Wednesday.

The company will ask federal bankruptcy Judge Caryl Delano to stay any attempt by creditors to liquidate the assets or take control of the company.

“We’re doing the right things,” Eason said. “This will give us a fresh start. It is a reorganization, not a liquidation. Everybody gets paid.”

The debt load was substantially increased last year when Creative Loafing purchased the Chicago Reader and the Washington City Paper. Since then, advertising revenues for the print editions of the papers has deteriorated, as they have for newspapers nationwide. Over the same period last year, revenues were down between 10 and 15 percent.

Among the largest unsecured creditors is Fayetteville Publishing Co., which prints the Atlanta paper and some of the other papers in the group. The Georgia Department of Labor, the Georgia Department of Revenue and the IRS are also among the creditors.

Creative Loafing was founded in 1972 by Debby Eason in Atlanta and later opened several other papers in the Southeast. Her son, Ben, who owned the Tampa paper, acquired the rest of the family newspapers in 2000.