UPDATE 1535: Creative Loafing chain sold to biggest creditor for $5 million (Atlanta Journal-Constitution)
UPDATE 1459: Washington City Paper Now Owned by Atalaya Capital (DCist)
Atalaya outbids Eason, assumes control of Creative Loafing (Creative Loafing Tampa)
UPDATE 1332: Hedge Fund Atalaya buys Creative Loafing in equity auction (Tampa Bay Business Journal)

UPDATE 1256: New York equity firm snaps up Tampa's Creative Loafing (Tampa Tribune/TBO.com)

UPDATE 1240:Chicago Reader Has New Owners (Chicago Reader)

UPDATE 1236:Tampa's Creative Loafing chain taken over by hedge fund Atalaya (St. Petersburg Times/tampabay.com)

UPDATE 1229: Atlanta Creative Loafing says Atalaya won.

UPDATE 1223: Chicago Reader calls it for Atalaya.

UPDATE 1218: Unconfirmed Twitter chatter is that Atalaya has won.

In Tampa, Fla., Judge Caryl Delano has begun the process of deciding who will own Creative Loafing, the newspaper chain that purchased Washington City Paper and the Chicago Reader in July 2007 and filed for Chapter 11 bankruptcy 14 months later. Creative Loafing CEO Ben Eason is bidding for the company, as is Atalaya Capital Management, which loaned Eason $30 million toward the original purchase.

Here are some links to current stories about the proceedings; I'll update them as new information becomes available.

Creative Loafing Auction Goes to Judge Today (Editor & Publisher)

Creative Loafing equity auction is underway (Creative Loafing Atlanta)

Reader Bidder Would Bring Jim O'Shea Back to Chicago Media (Chicago Reader)

Creative Loafing's publisher may lose chain of weeklies today (Tampa Tribune/TBO.com)

Will Creative Loafing's fate be decided today? (tampabay.com)

Battle to control Creative Loafing is heating up (Creative Loafing Atlanta)

After the jump: My favorite Post blog, old music. reality Realty, our parent company may need a CEO

I've beat this drum way too much, but I love Post Mortem, the Post's obituary blog, for precisely this reason.

Allow me to geeze: Twenty-five years ago, a spate of classic albums came out of Minneapolis---Purple Rain, Let It Be, and (thank you, Athitakis)  Zen Arcade. "Was it something in the water?" people will ask. More likely,  it was just a coincidence, and we don't remember all the crappy albums that came out of Minneapolis in 1984. I will write a paper on this and submit it to the EMP.

Nats lose.

Finally, for anyone who's been following the sorry tale of our parent company's bankruptcy, new stuff yesterday, very little of which I understand. Especially the part about the CEO maybe stepping down temporarily to concentrate on the equity auction that will determine who owns our company. Isn't concentrating on stuff like that what CEOs do?

Our wacky company. Jesus, our wacky company. Today was the day a judge in Florida was due to decide how best to conduct an equity auction next month that'll presumably end our company's nearly yearlong journey through bankruptcy. She kind of punted.

But: Talk about burying the lede! Following the ruling, Creative Loafing CEO Ben Eason said he was considering stepping down as CEO to, as Wayne Garcia reports, "focus on formulating a new equity bid for the post-bankruptcy company."

This leaves us without a CEO. And in the absence of an obvious candidate, may I suggest our own City Lights editor, Mike Riggs? Some points:

• Riggs is a Floridian, so Tampa, with its strip clubs, Hooterses, and insatiable appetite for Shawn Alff posts, would not present any cultural problems for him. In fact, last year Riggs held his birthday party at Hooters. Clinton Portis was there.
• And he's got ideas! On budget issues, Riggs writes: "Fly less. This is America, 2009, not Rome, 100. CEOs can govern via free teleconferences, instant messaging, and Skype. Also, in the case that travel is unavoidable, this company needs someone who can ride the rails and make use of their surroundings. I've read Travels with Lizbeth and can spot a safe head of lettuce in a dumpster full of syringes. Also: couch surfing. Hosts would be treated to one (1) comped soda per trip."
• On advertising strategy: "No one's got this down. I read somewhere that papers across the country are making less money this year than last year. Step one: Offer perks to advertisers and assume that we can afford them. Like in that episode of The Office, when Michael Scott offers the company's biggest client 50% off its massive paper order. Essentially, we would offer something 50% off, but probably not ads. Might even delegate the ad question to an expert, so long as the expert was willing to offer advice for $0.05 per pageview."
• On the transformation of journalism: "New media is my bread and butter. Twitter? Facebook? Social bookmarking? I know all about them. I'm probably going to make a tweet in about five minutes. First things first: No more paying for new media training. Young people use this stuff instinctively--I bet one or two of them would love to teach a bunch of grizzled newshounds the ins and outs of Digg, just for resume padding! Also, writers/bloggers in house/freelance would be contractually obligated to promote their own material. I'm not even kidding about this. Write post, email it to four people who are not your mom or roommate or your mom's friend. Boom. Traffic. Relationships. Social networking."

Riggs also has some worse ideas, but I'm trying to plead his case here. He's young! He's energetic! He's got "Stand Up & Raise Hell" tattooed on his chest! Judge Delano, what more do you need?

Photograph by Lilly Sadler

The Georgetown Metropolitan wonders: Does Jack Evans Abuse Parking Laws? There are incriminating photos of Evans' car clearly parked illegally---that is if he were just an average citizen. It is an open question whether he actually deserved a ticket.

Borderstan notes that construction has begun at the 17th-S-and-New Hampshire dog park. Post includes photos! Still, the project might be behind. The writer wonders: "I have not heard anything new on the opening date other than 'spring.' Anyone know anything more about a specific date?"

Bureaucrat310 chronicles a rough commute: "On this particular morning I was running late. Just as I descended into the columbia heights metro station I noticed that the next train would be arriving in 2 minutes. I hustle, run to the turnstile, swipe my card and get the dreaded 'go see a customer service agent' warning..."

Life in Mount Vernon Square posts the agenda for ANC6C's zoning and planning issues slated for its April 1 meeting.

River East Idealist talks about the proposed bag tax: "Nobody likes paying taxes. We pay income taxes, sales tax, property tax, capital gains tax, and even death tax! While no one enjoys giving money to the government, most of us will agree that each tax strategically contributes to the the social benefits of living in Washington DC. If Council Member Tommy Wells has his way, we will pay a 5 cent tax on each plastic and paper bag we consume via the Anacostia River Clean Up and Protection Act of 2009..."

Pop Cesspool confesses: "I do harbor a certain cockiness..."

Something important may be happening to WCP at 2 p.m.

Snyder's sub-Mensa-esque brainchild, the network of stand-alone kiddie hair salons known as Six Flags Rollercoaster Cuts, opened its first outlet in West Hartford, Ct., and started hawking costly coif makeovers with dumbass names -- The Glammy, Zoink, Big Kapow and Blama Jama -- to breeders of young New England bluebloods.

Yet the liberal media was only tweeting about the parent company's economic woes.

Seems Vegas is torn over what will come first: Snyder's company going bankrupt or 64 1/2 seed Morehead State getting bounced from the NCAA Tournament. (Gimme Morehead in that pool!)

In a conference call with Six Flags investors this morning, Snyder's cohort Mark Shapiro pinned Six Flags' sorry chances for staying afloat on a failure to communicate with his major creditors.

I'm no Ben Bernanke, but I'd say the hole Six Flags finds itself in is probably related to both whatever communication breakdown Shapiro is whining about, plus the fact that his company is MORE THAN $2 BILLION IN DEBT!

Yet before we credit all of Six Flags' problems to Snyder's ineptness, let's gander at Mark Shapiro's portfolio.

Shapiro's run with Snyder at Six Flags, during which the company's stock has gone from $11.93 a share down to 14 cents a share this morning, has been documented here.

But there's a lot more failure where that came from.

On May 9, 2008, Shapiro was elected to the board of directors of the Tribune Company. On Dec. 9, that corporation filed for Chapter 11 bankruptcy.

On Nov. 12, 2008, Live Nation named Shapiro to its board of directors.

Stock in the company traded at $7.84 on the day Shapiro was brought on board.

Today, Live Nation stock (LYV) was going for $2.64.

Shapiro is also a member of the United States Travel and Tourism Advisory Board.

The U.N. World Tourism Organization forecast a few weeks ago that a massive "tourism slump" was about to hit the U.S.

So maybe it's not Snyder? Maybe it's really The Curse of Mark Shapiro that's put Six Flags on the brink of nothingness?

Maybe we owe the Redskins owner an apology for all this Six Flagging muckraking?

Nah!

Keep the dial right here for all the breaking news in Snyder's Six Flags soap opera.

Such credentials have landed Rodriguez a spot on the roster of experts discussing the future--or lack thereof--for newspapers on the New York Times Web site.

Rodriguez predicts a time of turmoil in the world of local news coverage, with dailies cutting coverage or folding and new competitors trying to fill the void. "For a while it’ll be the Wild West in terms of journalistic standards, the rise and fall of old and new enterprises and an endless pursuit of new business models."

But he's got good news for papers like this one: "Among the best bets for adhering to traditional journalistic standards will be smaller, already-established newspapers that can expand their local influence. Alternative weeklies and ethnic media mostly will survive, and possibly even thrive by specializing in coverage of fields like entertainment or local politics."

Is Rodriguez keeping up on our bankruptcy?

This move was occasioned by a dispute between Creative Loafing and its biggest creditor, New York- and Atlanta-based Atalaya Capital Management, which loaned Creative Loafing Inc. (CLI) $30 million to purchase City Paper and the Chicago Reader last year and to pay down $15 million in debt that CLI already held. (CLI also borrowed $10 million from BIA Digital Partners in Chantilly, Va., when making the purchase.)

As collateral, Eason pledged his voting shares (he owns 100 percent of the company's class A stock).

Yesterday, as Atlanta Magazine's Steve Fennessy first reported, Atalaya filed an objection to CLI's "emergency motion" for a temporary restraining order, claiming that Eason's stock was owned by him alone, not the company, and as such was outside the scope of CL's bankruptcy. Further, Atalaya contested CLI's assertion that Eason "provides the vision and direction for the Debtors’ viewpoints of various issues, including social, political and cultural, that are occurring in each of the Debtors’ communities."

Yesterday, Judge Caryl Delano of Tampa, Fla., where the case is in motion, disagreed with Atalaya.

Had the company been successful, it would have been able to essentially take over Creative Loafing. "It was a legal maneuver they were doing to get more control," says Eason, speaking from his office in Tampa.

"When we filed the bankruptcy," he says, "there was a concern that Atalaya or BIA might use the collateral as a part of the bankruptcy to come in the backdoor and use the shares to basically foreclose on the shares and function as the board of directors."

Atalaya says Eason is not the "only employee or officer of the Debtors capable of managing the business" and that CLI hasn't “suggested that Mr. Eason will contribute anything in the way of credit, money, or property to fund any proposed plan. Mr. Eason will contribute only his time and energies for which the Debtors have proposed that he continue to receive a significant salary and potential bonus.”

In one particularly memorable section of the filing, Atalaya gives examples of companies in Chapter 11 whose sole proprietor was "the only person who can run the business": one was the only physician at his chiropractic clinic; another was "the only person with trade secret knowledge of how to process codfish in the Caribbean." (Note: I am now desperately trying to work the phrase "it's hardly processing codfish in the Caribbean" into my everyday speech.)

Eason calls this "a bit of an aggressive move." He characterizes the first 10 days of the bankruptcy, as "Day 1" hearings, when the court unfreezes the company's assets one by one---its ability to use its bank account, its ability to pay employees, freelancers, vendors, etc. He characterizes these hearings as "Can we turn the lights back on?

Yesterday's ruling was part of what Eason calls "Day 2 proceedings." He says CLI now has "a total timeout for 110 days," during which time CLI management will get a reorganization plan together. "Essentially...the initial set up is done," he says.

UPDATE (FRIDAY, OCT. 10; 6:15 P.M.): Via Tyler Brown, an attorney for Atalaya, this statement.

Atalaya Administrative, LLC, ("Atalaya") is the agent for the lenders who hold the senior secured loan outstanding to Creative Loafing, Inc. ("CLI") and its affiliates, which are debtors in chapter 11 cases in the U.S. Bankruptcy Court in Tampa, Florida.  Atalaya is owed in excess of $30 million by CLI.

Atalaya believes that the bankruptcy filing was unfortunate and unnecessary. It is very important that management of CLI continue to operate the business in the ordinary course and that the bankruptcy have as little negative impact on CLI's operations, employees, customers and vendors as is possible. Atalaya wants the business to succeed and, despite whatever court actions may be required to protect Atalaya's interests, wants to assure all interested parties that Atalaya has no intention of attempting to shut down the business. Atalaya believes that the business can succeed with the right management and business plan in place.

I'd joked that I didn't understand the lingo in the filings. I never took Latin, for one. Turns out Ben doesn't get it either:

I think we’re all getting used to this Chapter 11 lingo. Not sure I know what nunc pro tunc is either. The filings are a little confusing due to the fact that we’re current with all our bills, taxes and payroll but when this weeks bills come in the mail, we’ll update the filing. Additionally, the law requires you to list all the taxing authorities and all the sister companies so this quickly becomes confusing to those who aren’t used to these proceedings.

I'd also expressed some concerns about Eason getting dinged by the court for failing to include a complete list of his creditors and debts. He doesn't explain to the blogger. The way he tells it, we've just run into a bit of a rough patch.

All our pubs are profitable and we’re growing nicely online – we just ran head first into a brutal economy that isn’t showing any signs of getting better anytime soon. The City Paper and CL are doing fine – this just gives us the time we need to keep building out our digital strategies.

In general, the future looks bright. (This is from an earlier email to Rob.)

The trust and presence that City Paper has in the DC market is phenomenal and we think that the combination of DC and Chicago with the CL company give us the national reach to play a significant role in emerging media across the country. We're now able to really get deep into 3 of the top 10 markets in the country and with our brethren in the alternative industry, we're able to compete against the Silicon Valley funded dot coms that are challenging traditional media companies.

Here we come Google, watch out.

Actually, it looks like they did file a document showing how much the attorneys have already collected: a retainer of $185,000, a bit more than they told us we'd have to cut from the City Paper budget a while back.