By Tim Redmond
Our efforts to collect on the $21 million that SF Weekly and its parent company owe us continue. Here’s the latest — the SF Superior Court ruled that we can seize the rent that the SF Weekly’s subtenant pays to the paper.
Creditor Wins Collections Rights Action Against Village Voice Chain
San Francisco (12/23) — The San Francisco Bay Guardian Company on Tuesday was granted its motion to intercept the income of the SF Weekly, one of the newspapers in the Village Voice Media chain.
The Bay Guardian is pursuing the collection of its nearly $21 million judgment against the SF Weekly and New Times Media LLC, the holding company for the Village Voice chain.
The Village Voice chain is financed by a consortium of banks led by Bank of Montreal, which has exposure of over $80 million in loans to the chain according to a declaration filed in the case by BMO managing director Thomas McGraw on 12/17/09.
In a court hearing on Monday, an attorney for the Village Voice chain, Randall Farrimond, pleaded for the court not to enter the order assigning part of the SF Weekly’s income to the Bay Guardian. “If this motion is granted, the bank will declare a default,” Farrimond told the court, and concluded, “If the Bay Guardian thinks there are more assets than those pledged to Bank of Montreal, they are mistaken.”
The Bay Guardian is exploring the possibility of placing the Village Voice chain into an involuntary bankruptcy, but has also made a formal demand on Bank of Montreal to marshal the assets of the Village Voice chain as required by California law.
“Our fight is not with Bank of Montreal at this point,” said collection attorney Jay Adkisson, who successfully argued the motion on behalf of the Bay Guardian. “We’d be perfectly happy if Bank of Montreal was repaid every cent that it loaned to the Village Voice chain plus interest, and leave us to proceed against the rest.”
Several court hearings scheduled for January have the potential to substantially advance the Bay Guardian’s collection efforts, which have gained momentum in recent weeks. In November, the Bay Guardian successfully auctioned off vehicles belonging to the SF Weekly.
The judgment was entered after a jury found that several of the Village Voice companies engaged in predatory pricing against the smaller, locally-owned Bay Guardian. Shortly after the jury verdict, the court also entered an injunction against the guilty Village Voice companies to prohibit any future predatory pricing activities against the Bay Guardian.
The Bay Guardian has alleged that the Village Voice chain has continued its predatory pricing campaign even in violation of the injunction.
Under California law, post-judgment interest accrues at 10% per annum, which is more than $4,900 per day. The Village Voice chain will also be responsible for the substantial fees of the Bay Guardian’s attorneys which were incurred in collection efforts.