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Could a San Francisco court force a City Pages sale?

It seems so unlikely, and probably is, but the San Francisco Chronicle reported Thursday night that that city's Bay Guardian alt-weekly has won court approval "to raid the financial holdings of its arch-rival SF Weekly, its parent company and 16 other publications owned by the firm, including New York's Village Voice, to collect on a $21 million lawsuit judgment."

Chronicle reporter Bob Egelko writes that "the lien would enable" the Bay Guardian "to seek another court order allowing it to sell off any of the New Times papers — including SF Weekly — or simply take money from them to pay the judgment."

City Pages is one of those papers.

It's a long, strange story, one I've tracked for months but haven't blogged about because the local effects seem so improbable. Basically, a San Francisco Superior Court ruled that the Weekly and parent Village Voice Media engaged in predatory pricing by selling cut-rate ads to put the Bay Guardian out of business. While VVM is appealing the verdict, the $6.6 million jury award, boosted by a judge and and interest, has grown to $21 million.

VVM's bosses — no shrinking violets — insisted that the Bay Guardian will never see a penny, at least not before appeals courts were done vetting the work of hippie Haight judges and jurors. Then, a couple of weeks ago, the Bay Guardian crowed that they had seized and sold two VVM delivery trucks (fetching $2,500) and a sub-tenant's rent check. And now the latest court order.

Even so, the chain's financial dings are fairly minimal so far. And as noted here last month, City Pages' newsroom staffing will take an uptick once a replacement for reporter David Hansen is hired. Editor Kevin Hoffman says that should happen this month. Egelko notes VVM can keep the repo wolves at bay by posting a security bond, a common step that hasn't been taken.

The Bay Guardian claims that in court proceedings, a VVM banker stated "over $80 million" in assets are mortgaged to the Bank of Montreal. (Coincidentally, the Canadian bank assumed ownership of the bankrupt local Sun community-paper chain last June.)

Do I think our own alt-weekly will find itself with new owners? Not at this point, though CP is probably one of the more attractive papers in the VVM stable. Do I worry a lawsuit payout would eventually come from the local budget? Not all that much, but a long court fight can't help. VVM had better start winning in court, though, or we'll all have to start taking this a lot more seriously.

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Comments (1)

Wow. This is an incredible story with the kind of anti-glamour that I really love. Whether or not CP gets sucked into it, I can't thank you enough for bringing it to my attention.