Creative Loafing (Tampa) political editor Wayne Garcia says the plan, filed Monday in the company's Chapter 11 bankruptcy proceedings, makes the case for keeping the company in the hands of CEO Ben Eason. "The Debtor believes retention of existing senior management and existing publishers, editors, directors of shared services and key online personnel are vital to successful implementation of this strategy as the markets are shifting very quickly at this time," the plan reads. CL also filed a 10-year financial forecast and an analysis of how much the company would bring if it were liquidated. Read more from Atlanta Magazine's Steve Fennessy.
That's what sources tell Atlanta Magazine's Steve Fennessy about the first court date of the company's bankruptcy protection hearings. Next week, CL CEO Ben Eason has to submit his restructuring plan, which will then be discussed in court. In other CL-related news, The Sunday Paper's publisher and investor answer some questions about that paper's proposed expansion into two more CL cities (Charlotte and Tampa).
The Sunday Paper publisher Patrick Best announced his plans on Friday, citing the troubles of Creative Loafing -- which owns papers in Atlanta, Charlotte and Tampa -- as a major reason. "While we planned to go to both of these markets in the next few years, the troubles of the parent company of the major newsweeklies in both cities have convinced us to accelerate our plans," he says. Best, who was Creative Loafing (Atlanta)'s advertising director before launching The Sunday Paper, recently offered CL CEO Ben Eason $1 million for the Loaf's Atlanta publication. Best's expansion plans are being helped by funding from Brian Conley, the former owner of Knoxville, Tenn., AAN member Metro Pulse and current shareholder of Sunday Paper Publishing. Meanwhile, Atlanta Magazine's Steve Fennessy reports that Eason's main creditor filed a motion (PDF) on Friday claiming CL has not been forthcoming in explaining budgets and cash flow forecasts. The CL bankruptcy protection case is scheduled to go before a judge on Wednesday.
Patrick Best, who spent four years as CL's advertising director before starting rival publication The Sunday Paper, told Atlanta Magazine's Steve Fennessy last week he's willing to pay Ben Eason $1 million for Creative Loafing (Atlanta). Fennessy notes that it is unclear whether the purchase would even be possible, given CL's Chapter 11 status, but Best says "it's not unusual for businesses that are in bankruptcy to sell off pieces of their company in order to raise capital." MORE on Creative Loafing: Former senior editor (and current shareholder) John Sugg writes about CL's "death spiral," and Creative Loafing's Mara Shalhoup responds. And departing senior writer Andisheh Nouraee discusses why he is leaving with Atlanta Progressive News.
Ken Edelstein was fired today after a decade as an editor at Creative Loafing's flagship paper, according to Atlanta Magazine's Steve Fennessy. Edelstein reportedly had a "heated meeting" last week with CL CEO Ben Eason over the implementation of further editorial cuts. "The meeting made it clear that Ben and I have very deep philosophical differences about what's best for the company and its employees," Edelstein tells Fennessy. More from the Atlanta Journal-Constitution.
Atalaya Capital Management, which lent CL's Ben Eason $30 million to buy the Chicago Reader and Washington City Paper, has filed a motion (pdf file) asking that Eason not be allowed to hire the investment banking firm Skyway Capital Partners to help him emerge from bankruptcy. The main thrusts of Atalaya's argument are that Skyway is not a disinterested party, that Skyway's role will extend beyond mere financial advising into possibly brokering a sale of CL, and that Skyway is not a competent financial advisor. More from the Reader's Michael Miner.
Last week, Creative Loafing asked a bankruptcy judge to authorize CEO Ben Eason to hire the investment banking firm that brokered the Reader/City Paper purchase to evaluate the company's business plan, seek new financing, and prepare the company to be sold if necessary, Atlanta Magazine's Steve Fennessy reports. Meanwhile, Eason's largest creditor, Atalaya Capital Management, asked the judge to lift the automatic stay that prevented CL from defaulting on its loan, arguing that the value of the company is falling with each passing day due to the bankruptcy filing and to "downward trends in the advertising industry." Eason tells Fennessy he stands by his decision to expand. "I think it's one of the smartest things we've done," he says. "I'd rather be navigating [the economic downturn] with Washington City Paper and Chicago Reader and [syndicated column] Straight Dope than without them." MORE: The Reader's Michael Miner weighs in, and City Paper consolidates its office into one floor.
Edward McClelland measures his former paper's hip quotient, using the fictional Reader music critic who appeared in the 2000 film High Fidelity as a yardstick. "Today, if you made a movie about Chicago hipsters, Caroline Fortis probably wouldn't write for the Reader," McClelland writes in Columbia Journalism Review. "She'd write for Time Out Chicago, or Pitchfork." Reader editor Alison True, Creative Loafing CEO Ben Eason, and former Reader staff writers Neal Pollack and Harold Henderson weigh in with their takes on the Reader's past and its future.
Creative Loafing Inc.'s CEO says former staffer Steve Fennessy's coverage of his company's bankruptcy filing is mistaken in several respects. Eason says that Fennessy is "mis-reading the strength of CL's open and resilient culture and how this relates to its financial and journalistic success," and that he is not accounting "for the fundamental macro issues facing media companies and their financial footings." Eason also admits that court documents (pdf) filed last week by Creative Loafing were mistaken: Its July-to-September revenues were $8.3 million -- not $3.5 million, as the document states -- with print revenue declining 15 percent and online sales up 180 percent during that period, on a year-over-year basis.
