The assets of the former owners of Southern Voice, David magazine and three other LGBT publications are scheduled to be sold this month for a fraction of the $11 million debt that pushed the companies to bankruptcy.
The bids by the potential suitors include $8,000 for the assets of Southern Voice and David, $15,000 for the Washington Blade and $3,200 for the South Florida Blade and 411 magazine. The offers include property located in the offices of the former Window Media and Unite Media publications, URLs related to the publications and the right to use the names of the publications.
The bids were formally offered Jan. 29 and – barring bids from other parties – are scheduled to be approved during a hearing Feb. 25, according to filings in the bankruptcy case in the U.S. Bankruptcy Court of the Northern District of Georgia.
In Atlanta, an $8,000 bid for Southern Voice and David came from the Georgia Voice, LLC, which is a company formed in the wake of the Window Media collapse by Southern Voice founder Chris Cash and Laura Douglas-Brown, the paper’s editor when it closed. The Georgia Voice has plans to publish a paper called GA Voice, a name chosen during a public forum in December.
In Washington, a $15,000 bid for the Washington Blade came from Brown Naff Pitts Omnimedia, Inc., a company that includes former employees of the Washington Blade who launched D.C. Agenda in the wake of the Blade’s collapse. They include Kevin Naff, the Blade’s former editor, former Publisher Lynne Brown and sales executive Brian Pitts.
In Florida, a $3,200 bid for the South Florida Blade and 411 magazine came from Peter Clark, who is the Fort Lauderdale, Fla.-based publisher of Hotspots magazine. The sale also includes the URLs for Genre magazine, which ceased publication in March. After the closure of the publications in Florida, several former employees were hired by the publisher of Mark’s List Magazine and JumpOnMarksList.com who then launched Florida Agenda.
The trustee in the bankruptcy case has proposed selling the assets of the publication “as is, where is” during the Feb. 25 hearing. But the motion for sale also includes a caveat that all three sales are subject to higher offers from other parties prior to or during the hearing.
“The trustee shows that the proposed sale of the Window/Unite assets is beneficial to and in the best interests of the estate and its creditors. The proposed sale of the Window/Unite assets will allow the Debtors to obtain the maximum value for their assets. If the Court does not approve the proposed sale of the Window/Unite assets, it is likely that the value realized from the Debtors’ assets will be substantially lessened,” according to a motion filed Jan. 29 by trustee Jeffrey Kerr.
If the sales are approved, the Georgia Voice would pay $4,000 when the sale closes and an additional $4,000 in eight monthly installments beginning six months following closing. In Washington, the $15,000 will be paid at closing as will the $3,200 sales price for the publications in Florida.
In January, the trustee struck an agreement with New York-based M&T Trust, which loaned Window Media and Unite $1.25 million in late 2007. When the companies collapsed two years later, they had not repaid the loan and it was listed among its debts in bankruptcy filings. The agreement in January calls for M&T to receive $4,250 from the first $50,000 in proceeds from the sale of the Window and Unite assets, with $40,000 set aside for the estates and $5,750 for payments to the trustee. M&T would receive $47,500 of the next $50,000 from proceeds in any sale of assets and 70 percent of any amount in excess of $100,000 from the sale.
The parent companies of Southern Voice, David magazine and the three other LGBT publications collapsed Nov. 16 as they faced monthly losses of more than $195,000 and nearly $11 million in debt that covered all aspects of their operations and included unpaid payroll taxes, rent, printing and distribution, health insurance and freelancers.
The Washington Blade, long considered the cash cow of the combined companies, saw a nearly 45 percent drop in revenue from fiscal year 2008 to 2009. The slide started before that, as the Blade recorded $3.74 million in revenue in 2007, $3.38 million a year later and $1.80 million in 2009. The losses for Window Media — which included Southern Voice — were even more dramatic: From $1.69 million in revenue in 2007 to $1.21 million in 2008 to $587,320 in 2009.
Losses for Unite, which included David magazine, neared 40 percent from fiscal year 2008 to 2009. In 2007, the company recorded $3.55 million in revenue, dropping to $3.53 million a year later and plummeting to $2.13 million in 2009.
Southern Voice opened in 1988 and was acquired by Window Media a decade later. David first published in 1998 and was acquired by Unite in 2004. The Washington Blade, which celebrated its 40th anniversary last year, was acquired by Window in 2001.