More on CL’s bankruptcy

Dispatches from Chapter 11.

Atlanta Magazine’s Steve Fennessy has another update on CL’s adventures in bankruptcy.

CL CEO Ben Eason asked the court handling the company’s case for permission to hire financial advisor Bryan Crino of Tampa-based Skyway Financial Partners. Eason proposes paying Crino $495 per hour, as well as a commission between $250,000 to $600,000.

This week, CL’s creditors asked the bankruptcy judge to reject Eason’s proposal.

Fennessy:

CL’s largest creditor balks at Skyway’s “lavish compensation,” which includes at least a $600,000 bonus if the company is sold. Atalaya also points out that Crino, as he himself admitted in court papers, owns an interest in an entity that owns shares in Creative Loafing. Hmm.... A conflict of interest? Atalaya thinks so, and says that Crino is far from a disinterested party.

As far as that $600,000 clause is concerned, Atalaya has more to say, asserting such a clause would “bind” Creative Loafing Inc. to exorbitant fees for services that the chain may not even need.

In what appears to be a not-so-subtle jab at Skyway, Atalaya mentions that Crino and company helped advise Eason on the purchase of the Chicago and D.C. papers last year. “Less than two years later, the value of the combined operations of the Debtors is less than the sales price for those two operations alone. It is currently unknown ... whether the Debtors believe they may have claims against Skyway ... relating to any prior advice.”

Fennessy, a former senior writer and news editor at CL, also reports that morale is low as the awaits further layoffs.

“We’ll probably continue to trim staff as it relates to market conditions,” Eason told Fennessy last week.

Neither Eason, who was in Atlanta this week, nor anyone else at the company, has addressed the staff about layoffs.