Monday, September 29, 2008

Creative Loafing files for bankruptcy

Posted By on Mon, Sep 29, 2008 at 12:06 PM

Creative Loafing Inc., the company that owns Creative Loafing Charlotte, filed for Chapter 11 bankruptcy protection this morning.

Creative Loafing CEO Ben Eason said in a conference call with company management hours ago that the bankruptcy will have no affect on normal Creative Loafing business and that no liquidation or impending sale of the company is on the horizon. And all Creative Loafing employees and vendors will be paid on schedule.

“The term “bankruptcy” conjures up all kinds of images and demons but it is essentially a legal proceeding designed to give an over-leveraged company the time, process and a safe harbor for which to reorganize its finances,” said Eason in a company memo. “Chapter 11 was the natural place for the Company to go to accomplish an orderly reorganization of our finances.”

While business operations won’t change, according to Eason, the reorganization will better allow Creative Loafing — which also owns papers in Atlanta, the Tampa Bay area, Washington, D.C. and Chicago — to increase the company’s online presence.

“This is all about a fresh start,” said Eason.

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