Inc.

CL CEO Ben Eason has said that today's hearing (rescheduled from Monday) will likely determine whether or not he will be able to retain control of the six-paper chain. The actual auction is slated for Aug. 25, but Eason says that if the judge allows unfettered bidding by Atalaya Capital Management, the company's largest creditor, he may have no chance. He thinks that would be unfair and will ask the judge to restrict Atalaya's ability to bid. "What you'll see is the judge grappling with a core issue: How do you preside over a fair auction where one of the bidders has an advantage that would cause others not to bid," Eason says. "It's like pulling money out of one pocket and putting it into another."

Ben Eason tells the Chicago Reader that the key upcoming date in the ongoing bankruptcy saga of Creative Loafing is not Aug. 25, when the auction will be held, but July 27, when the judge sets the rules of the auction. He says the judge should restrict the ability of lender Atalaya Capital Management to bid on the company because "they'll put their money in and immediately take it out." He says that the issue should not just be who has the highest bid for the company, but the "highest and best" bid, which Eason thinks will be his. "For me it's my passion, my life, and everything," he says. "The real key here is not a financial play -- it's how everybody uses their publishing smarts and knowledge of online to fuse those models together. The game is not who's got the most money but who's got the most smarts to make the transition."

The Creative Loafing CEO tells Editor & Publisher that bankruptcy has given the six-paper chain the opportunity to speed its transformation to digital publishing and to cut its costs. He says that his staff is spending 90 percent of its energy on the web and the other 10 percent on print -- which would be impossible without bankruptcy. "Everyone in the business knows print pays the bills, but most folks don't understand that digital contributes to the profits," he says. In a pre-Chapter 11 company, "the profit expectation baked into the capital structure is entirely based on maintenance of historical print profit margins." Eason also says he expects CL to emerge from bankruptcy this summer.

Judge Caryl E. Delano has ruled in the CL CEO's favor, denying major creditor Atalaya's motions to take control of the company, Wayne Garcia of Creative Loafing (Tampa) reports from the courthouse. Though Eason will retain control, the judge is suggesting mediation for the two sides to come up with a mutually compatible reorganization plan instead of using the one put forth by Eason earlier in the bankruptcy proceedings.