Saturday, November 15, 2008
News CL bankruptcy: Banker could be in line for $600,000
Posted by Ken Edelstein on Sat, Nov 15, 2008 at 2:27 PM
Creative Loafing Inc. has asked a bankruptcy judge to allow it to pay $495 an hour to the investment banker who engineered last year's purchase by CL of two other alternative weeklies, according to Atlanta Magazine's Steve Fennessy. This time Skyway Capital Partners' Bryan Crino would be tasked with helping to solve the company's financial woes.
Under the company's Nov. 10 motion to the bankruptcy court, if Crino engineered a sale of Creative Loafing Inc., he and Tampa-based Skyway would be paid "whichever is greater—a cut of the sale or $600,000," Fennessy wrote Friday on his Cityscape blog.
CL Inc. CEO Ben Eason told Fennessy in an interview that Creative Loafing Inc. — which filed Sept. 29 for Chapter 11 bankruptcy protection — isn't for sale: "When you draft these agreements, you're trying to think through any and all options that might come up." But Eason does think Crino could help raise the money Eason needs to "recapitalize and recast" the company's debt. For that CL Inc. is proposing that Crino be paid at least $250,000.
Meanwhile, Eason said the company may suffer more layoffs. "We'll probably continue to trim staff as it relates to market conditions," he told Fennessy.
Creative Loafing/Atlanta is one of six alternative newsweeklies owned by Creative Loafing Inc. The others are Creative Loafing/Charlotte, Creative Loafing/Tampa, Creative Loafing/Sarasota, the Chicago Reader and Washington City Paper. The Chicago and DC papers were purchased last year in the deal that Crino helped orchestrate.
The motion to has yet to be ruled upon by U.S. Bankruptcy Judge Caryl Delano. CL Inc.'s main adversary is the Atalaya investment fund, which lent CL Inc. $30 million last July in part to buy the two papers.
Fennessy is a former news editor and senior writer for Creative Loafing/Atlanta.
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