REVIEW RSS FEED
WALL STREET EVEN TAKING OVER ALTERNATIVE NEWSPAPERS
DC Watch - Creative Loafing, the company that owns The Washington City Paper and The Chicago Reader, is in bankruptcy. Creative Loafing bought both papers two years ago, in July 2007, with a $30 million loan from Atalaya Capital Management of New York City and a $10 million loan from BIA Digital Partners of Virginia. On August 25, there will be an auction at which the two papers will be sold.
The only bidders are expected to be Atalaya and a partnership between Creative Loafing and BIA. If that's true, the winner will be Atalaya, because Atalaya is now owed $31 million, and will receive any proceeds from the auction up to that $31 million, after minor debtors are paid. Therefore, Atalaya can bid up to $31 million without actually spending any money. Because of that, Creative Loafing is asking the bankruptcy judge to disqualify Atalaya from bidding, which would essentially make Creative Loafing the default auction winner. Creative Loafing's CEO, Ben Eason, argues that the papers are his passion, that he's the best caretaker for them, and that Atalaya is just in the deal for the money.
posted by TPR | 3:40 PM
2 Comments:
Too bad, the Chicago Reader is good Stuff. I think it was their series on the Chicago PD's torture methods that got the ball rolling on police reform.
Thanks for reporting on this Undernews.
Just a clarification from someone who was at the last court hearing:
Creative Loafing isn't asking the judge to disqualify Atalaya from bidding. CEO Ben Eason wants the judge to consider not just the highest bidder, but the "best" bidder. His angle is this: He's currently engaged in bringing all the papers into the 21st century through a "digital transformation" and he alone has the expertise and knowledge to bring profits back to the papers vs. a hedge fund which may just sell off some of the papers.
That's his argument. The counter argument is Eason ran the papers into the ground, barely 10 percent of his revenues are digital based and Atalaya has said they will put more money into the papers not just sell them off.
The judge will decide on the auction rules this week. Then the auction will be held on Aug. 25.
Post a Comment
<< Home