Yesse! Files For Chapter 11 Bankruptcy

Company plans to focus on midsize markets; will try to sell the Octopus.

Small-market woes and the slowing economy led Yesse! Communications to seek financial shelter this week by filing for Chapter 11 bankruptcy. Yesse! CEO Craig Hitchcock told AAN News that the move would buy his company time to focus on its three strongest papers — AAN members Bloomington Independent in Indiana; Illinois Times in Springfield; and Dayton, Ohio’s Impact Weekly — while looking to future growth in mid-size markets. Hitchcock said the company would try to sell its fourth paper, The Octopus, a smaller-circulation publication based in Champaign-Urbana, Ill., while working out the details of debt repayment. The Octopus applied for AAN membership earlier this year. The announcement comes just a little more than two months after Yesse! chose to shutter Icon, an Iowa City weekly which the Midwestern chain first attempted to sell. “We’re going to take this one step at a time,” said Hitchcock. “This gives us time to refocus our business plan on mid-size markets and hopefully work out the sale of the Octopus.” Beyond the pending sale — Hitchock said a local Champaign couple with a publishing background has shown interest — he doesn’t anticipate any management or operational changes at Yesse!’s other publications. In fact, Hitchcock predicts that by the end of the year, they will all be breaking even. Once those publications stabilize, the company will look for potential acquisitions in cities with populations ranging from 200,000 to a million people, he said. “We’ve learned in the past four years that in the smallest markets, it can be a lot harder to turn things around,” he said. “We spent a lot of time and money on keeping these papers open. We did not buy them in order to close them down.” Hitchcock added that Yesse! probably would have tried to sell the Octopus regardless of the company’s current financial problems, and he suspects that he waited too long before closing Icon. Hitchcock acknowledged that the closure made it difficult to sell the paper. He said Yesse! expects to operate the Octopus until a buyer comes along. San Antonio Current Publisher Simon Mulverhill, who previously worked for the Illinois Times as advertising director and pulled double duty as publisher of both the Times and Octopus for nine months, acknowledged that publishing an alternative weekly can be a daunting challenge in a small-town environment. “Iowa City and Champaign are tough markets to try and pull a profit,” he said, adding that his decision to head south stemmed from opportunity and not a management conflict. Yesse! filed its bankruptcy petition on April 9. According to a U.S. Bankruptcy Court Web site, Chapter 11 is sometimes called a “reorganizational bankruptcy.” It allows a company to continue business operations while restructuring its finances in order to “pay its employees, resolve its debts and produce a return for its stockholders.” According to a press release issued yesterday by Yesse!, the company has been working with a Washington D.C. investment-banking firm: “Going forward, management believes Bloomington, Dayton and Springfield can provide the foundation for future growth in mid-size markets.” “We are determined to emerge from reorganization with stronger cash flow, new capital and a plan for growth,” Hitchcock said in the release. Dan Oko is a freelance writer based in Austin, Texas, and frequent contributor to the Austin Chronicle.