Santa Barbara News-Press’ parent company files for bankruptcy
SANTA BARBARA, Calif. – Santa Barbara News-Press' parent company filed a Chapter 7 bankruptcy petition in the U. S. Bankruptcy Court, Central District of California on Friday.
The 150-year-old print outlet, owned by Ampersand Publishing LLC, listed assets of less than $50,000 and liabilities of between $1 million and $10 million according to voluntary bankruptcy forms.
Now, employees who worked until the last online publication Friday are being told there is no more money, and their final paychecks won't come until after the bankruptcy case is decided.
Chapter 7 filings are largely for liquidation of businesses as opposed to managed asset reorganizations such as Chapter 11 or 13 filings.
Labor Attorney Ian Gottlieb, with the Bush Gottlieb Law Firm, said he has had run-ins with the paper before and expects more fighting now with this type of liquidation, which often leads to little recourse for those owed money.
“That is part of the floor of of a major flaw of our justice system and our labor laws as they exist today," said Gottlieb. "The remedies are not adequate. They take a very long time to to come to fruition if an employer is willing to spend money on his or her lawyers to delay the process and forestall any remedy, and that's what's happened here.”
The filings indicate an estimated 200 to 999 different creditors, and a meeting of creditors is scheduled for Sept. 7 at 9 a.m.
The petition filed on Friday imposes an automatic stay against most collection activities.
“I have to assume and we will fight this as much as we can, that Ampersand is planning to deny any remedy, remedial relief, any monetary relief for any of these dozens of employees," said Gottlieb. "And that's its objective in the bankruptcy. Whether it actually can achieve that remains to be seen.”
Gottlieb said the News-Press owes more than $2,000,000 to current and former newsroom employees from labor judgments dating back more than a decade.
“I mean, these unfair labor practices were committed by Ampersand beginning in 2008. And here we are 14 plus years later—15, really," explained Gottlieb. "And no one has been paid a dime of this $2 million.”
Santa Barbara New-Press was founded in 1868 and received a Pulitzer Prize in 1962 for its coverage of the John Birch Society.
More recently, News-Press was purchased by Wendy McCaw from New York Times Co. in 2000 for a reported $110 million.
The former print outfit moved staff from its downtown Santa Barbara location on De la Guerra Plaza to its Goleta-based printing plant earlier this year where it claimed power issues prevented continuing print operations and moving entirely online.
