Washington City Paper Future Discussed in Tampa Courtroom
Representatives of Washington City Paper's parent company, Creative Loafing Inc., are today sitting through what is shaping up like a marathon hearing in a Tampa bankruptcy court, according to Wayne Garcia, a correspondent for our sister paper in Tampa. At issue is ownership of the company: Creative Loafing declared Chapter 11 bankruptcy last fall after falling behind in debt payments to its principal lender, Atalaya Capital Management LP.
Atalaya, which is owed $31 million, is seeking to take control of the company and, according to Garcia, is pledging to invest more heavily in the product if it's allowed to do so. An Atalaya rep, reports Garcia, said his firm "would be willing to spend more money to increase revenues at the newspaper chain, but only if it can displace the current management and ownership....Atalaya would seek to publish 'a quality publication' in order to maximize its investment."
In a moment of sheer irony, Atalaya pointed the court to comments on "blogs" as evidence that workers in the Creative Loafing chain were demoralized. A lawyer representing Creative Loafing objected to the admission of such evidence, and the court agreed to disallow it. So there you have it: The publisher of numerous blogs objects to their inclusion in the court record.
2:22 pm
It'd be interesting to know whether the objection was to the mention of information "gleaned from blogs" or to the creditors' raising the issue of employee morale at all.
2:42 pm
So comments on a blog are, according to Ben and company, not admissable, but it's okay to put a clause in a severance agreement that bars former employees from talking down the company in the comment section of a blog?
Not that I would do any such thing, of course. ;)
3:19 pm
NP: Good question. I think the issue of employee morale is always a loser. Terribly subjective, never reliable, always manipulable. There's not a beat cop in the country right now who would tell you that morale in his/her department is high.
4:34 pm
Oh. interesting that Eason and the gang has a problem with his employees telling the truth. What happened to the "rich internal dialogue" we were supposed to be having?
5:34 pm
If Atalaya is willing to invest more in circulation, marketing and editorial staff- I say go for it. But if they are looking to come in and reinvent the whole paper/model- I say keep them out. yes, from what I know- most of the staff is terribly demoralized and miserable.
5:34 pm
there is likely a legal reason for not admitting the comments into the record. there's no way to authenticate the comments or be certain that they are from actual former CL employees.
6:40 pm
Outside of the irony, it really is just a technical issue of hearsay evidence. The Atalaya rep testified he has no firsthand knowledge of employee morale one way or the other and has not spoken to any Creative Loafing employees about it.
6:40 pm
Sara h. is right; she gets a law school scholarship if we can dig one up
6:41 pm
My afternoon update at http://blogs.creativeloafing.com/politicalwhore/2009/03/11/creative-loafing-bankruptcy-expert-says-companys-value-dropped-7-million-in-three-months/
8:01 pm
Won't except blog testimony? I say all former (and current if you know what's good for you) loafers send letters to the judge and atalya lawyer about the morale...
9:22 am
Let's get back to the real questions: is CP better off with Eason, or with Atalaya? Would Eason or Atalaya be more likely to sell CP off, and what would be CP's prospects on the market at this time?
11:55 am
@wayne garcia - a little late for a scholarship unless it's retroactive. thanks for thinking of me though.