At today’s equity auction, federal bankruptcy judge Caryl E. Delano gave control of Creative Loafing, Inc. to the company’s largest creditor, Atalaya Capital Management. Atalaya’s all-cash bid of $5 million won out over Creative Loafing CEO Ben Eason’s bid of $2.32 million in cash and other securities. The deal is expected to close within 10 days.

Atalaya managing partner Michael Bogdan says he’s committed to keeping the papers running. “We are here for the long haul and we want to make this work,” Bogdan said in court.

Creative Loafing (Tampa) has more details on the makeup of the board that will oversee the operations of Creative Loafing. Names include former Los Angeles Times editor Jim O’Shea; Richard Gilbert, a former executive with the Des Moines Register and the Pioneer Press in suburban Chicago; and Michelle Laven, formerly of the New Times alt-weekly chain and currently at Clear Channel LA. The American Press Institute’s Elaine Clisham, who formerly worked at Village Voice and at AAN, will also advise the board, according to Creative Loafing. (Though CL reports that Clisham no longer works at API, we’re pretty sure she does.)

Atalaya’s Bogdan tells the Chicago Reader‘s Michael Miner that “we can provide the financial and human resources necessary to bring this company to the next level.” He concedes that the hedge fund won’t own the six papers “forever,” but says “we’ll be living with you guys for a while.”

Meanwhile, O’Shea tells Miner that he thinks Atalaya needs to reinvest resources in the Reader. “In our analysis, the cuts at the Reader were disproportionately made in editorial and in sales,” he says. “I always saw the Reader as a place for good longer-form journalism, good investigative stuff. I think it lost some of that under Creative Loafing. Whenever you start cutting people and cutting resources, it shows.”

O’Shea echoed that sentiment in comments to the Chicago Tribune. “They’ve done a lot of analysis about the company,” O’Shea says of Atalaya. “They’re serious about this. If they (weren’t) I’d have said get somebody else.”

“We do not plan any layoffs,” Atalaya’s Bogdan tells the Atlanta Journal-Constitution. He says the publishers from the six papers will meet Wednesday to begin discussing how to build readership and restore profitability to the company.

“For me, personally, this is a very sad day. For the company, it’s an emotional day,” Eason tells the Tampa Bay Business Journal. “This is a very resilient company, and life goes on. These guys will do fine. The company is going to come out of bankruptcy, which is great. But the publishers need to keep the heart and soul of the company intact. That will be key to keeping it successful.”

Creative Loafing (Atlanta) senior editor Mara Shalhoup tells the Journal-Constitution that there was “relief” in the newsroom today, but that she “would stop short of calling it a celebration … because the Eason family has owned this paper for three decades.”

Washington City Paper editor Erik Wemple tells DCist.com that it’s good that his paper will no longer have to operate under CL’s debt, but that many questions remain about life under Atalaya. “There’s no real whoops and hollers of joy around here, simply because there’s a great deal that’s unknown,” Wemple says. “A change of ownership doesn’t mean that all of a sudden newspapering is a different environment.”

The St. Petersburg Times reports that Eason says he will launch an online-only publication in the Tampa area as soon as this week. “I’ve started three newspapers in my time,” Eason says. “I’ll start a fourth.”