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.