Creative Loafing bankruptcy: No ruling tonight in ownership issue
March 17, 2009 at 5:41 pm by Wayne GarciaDon’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.
Mard’s values were opposite the trend shown by Atalaya’s own valuator, who said the chain has lost $7 million in value since declaring bankruptcy.
The valuation is important because Atalaya is asking the court to lift its automatic injunction against enforcing its default, arguing that the value of its loan collateral (the company itself) is diminishing while it has no ability to enforce its loan covenants or make changes at the company.
Delano said she will ask both sides to submit closing arguments in writing after tonight’s testimony concludes, and then will take several days to consider the issues before making a ruling in an as-yet unscheduled telephone conference call with the two parties.
Stay tuned.
March 17th, 2009 at 6:08 pm
We trust in fate and in anticipation of a favorable ruling from the bench, we priests of Atalaya are sharpening our scythes and writing down our lists of those to be sacrificed when the odious Eason is cast out.
March 17th, 2009 at 6:09 pm
PS we’re amenable to bribes.
March 17th, 2009 at 10:18 pm
The only way the Loaf may have managed to stay afloat these past few months is by continuing to gut its brand. The example that Eason pointed to–the Tampa paper–is merely his experiment in non-journalism journalism.
If Eason is allowed to stay on as head of the Loaf, it will mean huge staff cuts. Paper staffs would be cut in half in favor of “citizen journalists” being paid pennies per page view.
You can say goodbye to what made the Washington City Paper and the Chicago Reader award winning papers.
March 17th, 2009 at 10:21 pm
Since the bankruptcy filing, Eason has gutted the tech personnel who handle/design the company’s websites. We know have a web staff of two. That’s two employees to design web pages, shoot and edit video, and maintain the blogs as well as trouble shoot the problems with our site that regularly come up.
I wonder if Eason was questioned about that. He claims the future of Creative Loafing is on the web. Yet after the bankruptcy filing he’s lost three web employees–having fired two of them. These are just the ones I know about.
Oh yeah, they were both fired on the day of our staff X-Mas party. Classy.
March 18th, 2009 at 9:10 am
It would be a shame to see these good papers destroyed by bad business decisions. There is a model combining print and online publications that will work – but it’s not Eason’s model. His path will be like Seattle P-I which I predict will not last long.
March 18th, 2009 at 9:46 am
Observer, can you detail the model that you have in mind?
March 18th, 2009 at 5:40 pm
Hey! I’ve done *my* part. Yesterday I placed a 4-week classified, complete with graphic, in the Sarasota edition. :)