Ojai Valley News faces uncertain future as owners file for bankruptcy

The owners of the Ojai Valley News have filed for bankruptcy protection, putting the future of the 124-year-old community newspaper at risk.

William Buchanan and his wife, Ava Buchanan, filed for personal bankruptcy on May 5 in the United States Bankruptcy Court for the Northern District of Alabama. The Buchanans live in Tuscaloosa, Alabama, and lists 100 percent ownership in the Ojai Valley News and three other communications-related companies.

The bankruptcy case is still pending.

According to court filings, the Buchanans owe $2.3 million, including $1.7 million in various credit card and bank loan debts, much of it related to their businesses.

The couple also lists ownership of Marion County Newspapers Inc. in Tennessee, and Alabama-based Buchanan Communications and Newspaper Machinery and Equipment LLC. All of these assets, including Ojai Valley Newspapers LLC, are valued at $1 on the bankruptcy filing. Of the liabilities listed, the largest debt owed is $1.2 million to Excelsior Capital Partners South LLC, for business expenses on Buchanan Communications.

The Buchanans' attorney, Lee Benton, said as part of the bankruptcy proceedings, ownership of the Ojai paper has been turned over to a trustee.

In a bankruptcy case, the court appoints a trustee to liquidate an applicant's assets and use the funds to pay off creditors, explained Michael Sment, chairman of the Ventura County Bar Association's bankruptcy section.

Benton said he believes the trustee, Rocco Leo, is trying to sell the Ojai Valley News to a third party to help with the payoff. Benton did not have information about who the potential purchaser is.

"I don't think they're trying to put the newspaper out of business," he said. "I think if anything they're trying to keep it operating."

Max C. Pope Jr., an attorney for the trustee, confirmed that somebody will likely buy the newspaper, but he doesn't know who at this point.

"The best I can tell is it's going to keep on going," he said. "If you shut down the newspaper, all there are is probably a bunch of old computers, couple of old desks, and that's not worth a whole lot as opposed to the newspaper that's a going concern."

A going concern is an accounting term for a company deemed to have enough resources to continue operating indefinitely.

The Ojai Valley News was first published in 1891, when it was called The Ojai. According to its website, the online version of the newspaper receives more than 365,000 visits a year.

Asked about the future of the paper, Ojai Valley News publisher Tim Dewar said in an interview earlier this week that he is under a court order to remain silent.

"I can't tell you anything at this point," he said.

On Thursday afternoon, Dewar posted a message on the Ojai Valley News website. Among other things, he noted that the company's major creditor, Excelsior Capital Partners, has agreed to a plan that would allow a local group of investors to assume ownership. "While this plan still faces a few hurdles, for the first time since the process started, all sides are working towards that common goal," he wrote.

Dewar did not identify the investors, but said they have "asked me to stay on as publisher and continue to operate the company."

Ojai Mayor Severo Lara said he hopes the newspaper stays open. He said the Ojai Valley News is an important information resource for the community. The newspaper's articles, opinion section and letters to the editor also helps the City Council get a better sense of how community members feel about local issues, Lara said.

"The neat part of having a newspaper here in the valley is that it only really focuses on issues going on around here," he said. "Our community is an older community, so in my opinion we do depend on the newspaper quite a bit. ? I hope we still do keep it and someone will be able to salvage it, or start another newspaper here in the valley."

Article from:- http://www.vcstar.com




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