Tuesday, March 16, 2010

Village Voice Media $80 million in default

The parent company of the SF Weekly, Village Voice Media, has been declared in default on an $80 million loan it has from the Bank of Montreal, according to the Seattle alt-weekly the Stranger.

That means that both the bank and the Bay Guardian, which has a $21 million judgment against the SF Weekly and VVM, are sending letters to SF Weekly advertisers, saying they should receive payment for ads in the paper.

The attorney for VVM ran to court to get a temporary restraining order to stop the Guardian from collecting from the SF Weekly's advertisers.

"The confusion created by the Bay Guardian notice is causing advertisers to withhold all payment, to threaten to pull [their] advertising out of the SF Weekly, and, if Bay Guardian is permitted to continue this tactic, is likely to devastate SF Weekly's advertising business beyond repair ... No advertiser or potential advertiser will tolerate for long the burden of navigating confusing and contradictory legal notices in order to pay a simple invoice," SF Weekly attorney Randall S. Farrimond wrote in his request for a restraining order.

The Seattle paper reports that Farrimond's request for a restraining order was rejected and that SF Weekly ad revenue will be forwarded to a neutral bank account, according to Jay Adkisson, the Guardian's collection attorney.

Village Voice Media is a Phoenix-based chain of 13 papers including the OC Weekly in Orange County, Miami New Times, Seattle Weekly, Westword in Denver, Houston Press and Dallas Observer.

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