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Monday, September 29, 2008
Inside CL Creative Loafing files for bankuptcy
Posted By Carlton Hargro on Mon, Sep 29, 2008 at 12:12 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 to increase its online presence. And although the company incurred new debts when it recently acquired papers in Washington and Chicago (CL owns papers in Charlotte, Washington, D.C., Chicago, Atlanta and the Tampa Bay area.), Eason asserts that the purchases did not play a role in the reorganization plan
“This filing has little to do with the acquisition and everyone should feel very proud of what we’ve accomplished,” reads the company memo. “It hasn’t been easy but it has been successful. The assumptions we made have not turned out to be so successful. The print business has been under siege from all quarters with the exception of the one place that counts; audience.
"This," said Eason, "is all about a fresh start."
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