The parent company of D.C.’s City Paper filed for bankruptcy Monday, casting a pall over the alternative weekly’s staff and its future.
Creative Loafing Inc. is seeking Chapter 11 protection so that it can keep its lenders from carving the company up.
“This is something of a shocker,” City Paper Editor Erik Wemple told The Examiner. “But if they can use the reorganization laws under Chapter 11 to give us some breathing room, that’d be great.”
Executives stressed the positives Monday, saying that bankruptcy was the best choice for the company.
“The company owed more money than it can pay back right now,” Chief Executive Officer Ben Eason was quoted as saying on the company’s Web log. “This will give us a fresh start.”
Creative Loafing bought City Paper last year and slashed its staff almost immediately. Through the fall and winter of 2007-08, the company cut about eight editorial jobs, Wemple told The Examiner.
Now down to about 12 editorial employees, the paper has been promised that no further cuts are looming, Wemple said. In fact, firings were scheduled to begin in October, but those have been rescinded, company officials said.
“Everybody gets paid,” Eason said. “It’s a reorganization, not a liquidation. We’re doing the right things.”
It’s not clear whether City Paper will be sold off. Conventional wisdom has it that newspapers are in decline.
“It’s still an asset, although I can’t see it being an enormous asset in this economy and this environment,” Wemple said. “Obviously, we’re all hoping for the best.”
City Paper was founded in 1981. Like many self-styled “alternative” weeklies, it offered magazine-style writing in the spirit of New York’s Village Voice, promising to deliver a hipper and brasher view of urban life. But the paper has struggled in recent years. Creative Loafing officials estimated that advertising revenues have dipped by up to 15 percent since last year.
The company is more than $40 million in debt. It also owns weeklies in Chicago, Atlanta, Charlotte, N.C., and Tampa and Sarasota, Fla.
