Southern Voice faces ‘liquidation’ by feds

Creative Loafing has a lot in common with Southern Voice, Atlanta’s gay weekly: We’re both part of larger media companies based in Florida. We both have sibling papers in Florida and Washington, D.C. And each of our parent companies borrowed about $40 million and is having big problems making paying off the debt.

That’s according to an article by NYC-based Gay City News (don’t you hate these ambiguous, wishy-washy publication names?). The GCN reports that the Avalon Equity Fund, which owns SoVo, the Washington Blade, the South Florida Blade and Genre Magazine, has been forced into receivership and faces liquidation.

I freely admit that, despite having once been assigned to a business beat, I’m not entirely clear on the difference between receivership and bankruptcy — which is CL’s current legal status. However, my understanding is that receivership is a more dire step in the bankruptcy process that involves selling off the debtor’s assets to recoup a portion of the unpaid loan amount.

I’m also guessing we didn’t hear that SoVo was facing bankruptcy because the money it borrowed didn’t come from a private lender, but from the federal gubmint — specifically, from the Small Business Association. My guess (again!) is that companies aren’t allowed to seek bankruptcy protection from Uncle Sam.

What does this mean for SoVo? Well, if anyone at the newspaper or its corporate offices had returned my several messages, I might have a better idea. Based on the GCN article, it seems likely that the weekly will soon be put up for sale. Newspapers rarely have any conventional assets; their only value typically is in their brand. In other words, they’re only worth anything if they continue publishing.

It’s our hope that SoVo is able to hang in there. Hey, we know what it’s like.