Edhat Staff
By the edhat staff
The latest bankruptcy filing documents show the recently shuttered Santa Barbara News-Press’ holding company, Ampersand Publishing, owes $5.13 million to creditors.
Wendy McCaw, the sole owner of the publishing company, owes employees, vendors, utility companies, labor dispute settlements, and subscribers, but the biggest debt is to herself, reports Giana Magnoli.
Ampersand Publishing fired its News-Press staff and filed Chapter 7 bankruptcy that governs the process of liquidation under U.S. law. on July 21 in the U.S. Central District of California Bankruptcy Court located at 1415 State Street, a building that McCaw owns.The initial court filing listed the companies assets as less than $50,000, liabilities between $1-10 million, and owed 200-999 creditors.
The historic building at 715 Anacapa Street in Santa Barbara and the printing press building at 725 S. Kellogg Ave in Goleta were transferred to separate companies owned by McCaw in 2014.
In a document filed earlier this month, McCaw states Ampersand Publishing has a little over $500 in the bank with $116,000 in property such as furniture, computers, and vehicles. The paper’s archives and printing presses are listed with unknown value.
Just a few of the creditors include about 800 subscribers who never received subscription refunds, $2.2 million to former employees as part of a National Labor Relations Board judgement, $176,000 to Southern California Edison, $34,000 to Santa Barbara County, and $15,000 to the city of Santa Barbara.
A list of six separate debts were also listed to organizations and limited liability corporations (LLCs) that belong to McCaw or co-publisher Arthur Von Wiesenberger that totaled a little more than $2.15 million.
The News-Press greceived a gross revenue of $2.97 million last year and received $1.1 million in federal Paycheck Protection Program loans during the COVID-19 pandemic, according to public records.
Last month former Managing Editor Dave Mason wrote an email to staff stating, “I have some bad news. Wendy [McCaw] filed for bankruptcy on Friday. All of our jobs are eliminated, and the News-Press has stopped publishing. They ran out of money to pay us. They will issue final paychecks when the bankruptcy is approved in court.”
Last October, we reported the News-Press would stop delivering papers to its subscriber’s homes and instead would issue vouchers to redeem at select locations. Then in April we reported the dwindling staff of the Santa Barbara News-Press had vacated the historic downtown building at 715 Anacapa Street and announced moving all of its administrative operations, including its newsroom and advertising and circulation services, to the Goleta printing plant.
In June the paper announced a pause on all printing and a focus on digital news. A note was issued on the paper’s front page stating the printing editions will be temporarily unavailalbe due to “power issues” with their printing plant at 725 S. Kellogg Ave. in Goleta. Weeks later it was stated the online-only format would be permanent.
The Santa Barbara News-Press began printing as a weekly paper, The Santa Barbara Post in 1868, and after an acquisition in 1932 and a merger was renamed the News-Press. The respected paper won the Pulitzer Prize for Editorial Writing in 1962 under the tutelage of T.M. Storke. The paper was sold in 1964 before being sold again to The New York Times in 1984.
The paper’s current owner and alleged billionaire living in Hope Ranch, Wendy P. McCaw, purchased the paper in 2000 for a reported $110 million. In 2006, controversy swirled the once notable publication as editors and writers resigned with claims of McCaw interferring in the newsroom.
More reporters and staffers were fired, or resigned, leading to numerous lawsuits and an all-out boycott of the paper by the majority of Santa Barbara residents. In 2008 a feature-length documentary titled “Citizen McCaw” played before a sold-out crowd at the Arlington Theatre.
Former News-Press journalists, Melinda Burns and Dawn Hobbs, penned an opinion piece in 2020 on McCaw’s “abuse of power.” They reported an administrative law judge of the National Labor Relations Board ordered McCaw to pay $2 million to the employee union and nearly 50 newsroom employees, in restitution for labor law violations going back a dozen years. This cost was included in the list of debtors.
It’s unclear what will happen to the flagship building and parking lot at 715 Anacapa Street that’s believed to still be owned by McCaw, although an edhat reader informed us the parking lot has recently begun renting out parking spots.
A meeting for creditors is scheduled for September 7, 2023.
Oh wow, her nastiness goes on & on.
I just found this, been behind on local news:
“The defunct Santa Barbara News-Press is continuing to bill subscribers, according to one octogenarian in Noleta. Her friend, Sandy Shertzer, contacted the Independent to spread the word, saying his “Noleta grandma buddy” had $120 automatically deducted from her bank account on September 9, seven weeks after the newspaper announced its July 21 bankruptcy.”
September 12
https://www.independent.com/2023/09/12/bankrupt-santa-barbara-news-press-still-billing-subscribers/
We expect nothing more or less from McCaw:
“The bankruptcy Trustee Jerry Namba did not return messages asking for information on the position subscribers are in who’ve been billed by the bankrupt paper. In a creditors meeting on September 7, News-Press owner and publisher Wendy McCaw was unable to answer questions about subscriptions, instead deferring to ex-employees, who her attorneys said they had not been able to reach and who are still owed their last paychecks.”
My favorite quote: “…but the biggest debt is to herself,…”, what’s better than that?
McCaw is almost certainly writing off losses against other gains. The fact that she’s among the “creditors” doesn’t mean there’s not nonsense potentially afoot that can be challenged in bankruptcy proceedings… especially related to 1. the sale of the building (despite being 10 years old) and 2. the $2.2 mil owed after the NLRB finding.
Those stiffed should be digging in with bankruptcy attorneys, especially concerning the sale of the building. Depending on the details, transfers can be challenged well outside of the normally established “preference periods” in bankruptcy, especially with regards to large transfers and corporations with standing debt-obligations with debt-service trajectories.
PS – Apologies for double-commenting — The fact that a billionaire in full control of an operation can say “oops, no money!” and try to stiff old employees is a great example of how we have drifted toward crony, corporate capitalism in today’s US of A.
Money has almost completely corrupted our nation. The laws and tax and criminal courts simply have been bought by wealth. It is so sad that the aspirational nation of middle class farmers and workers and business people has lead to this. She and other uber rich people simply can ignore the laws or work around them or delay their application indefinitely. We do need to push for democracy in this nation and that means things that will be called “socialism” and “communism” but which are really the right of human beings to protect themselves from the vultures.
An entertaining editorial:
https://www.independent.com/2023/07/26/santa-barbara-news-press-autopsy-results-death-by-spit/
Did anyone besides Wendy and Arthur ever believe that the SBNP as it has been operating for the past several years would be economically viable? I don’t feel sorry for the subscribers that willingly paid for the poor excuse the SBNP became years ago. Hoping the bankruptcy judge will claw back the assets (buildings) that were transferred out of Ampersand after the NLRB judgements were handed down to pay the former employees.
So sad to see that a former billionaire is completely broke. When you see Wendy huddled on a cardboard box by the courthouse or pan handling bar patrons in the 500 block of State Street, please consider giving her a dollar or two.
Rich or poor, bankruptcy laws and protections are in place to protect those who legally qualify. It seems like some do not want those protections in place for those with whom we disagree. It would seem that something is wrong when bad things happen to people we “hate.” Give it a break people. The SBNP is done/done/done, so go to the next thing to obsess over. Time to move on….go forward….enjoy things that should be enjoyed and not enjoy bad things that happen to other people…..like really. Like my father used to say, “There’s hardly enough time in our lives to take care of ourselves, so don’t spend time worrying about others and things we cannot change.” I always took his advice to heart and enjoy spreading his good advice to those who will listen.
10:19 – Pretty defeatist advice. What’s good about it? It’s exactly what people who exploit you want you to think.
Nothing bad happened to McCaw, she’s just playing the game out to her advantage. And screwing over many other people and companies in the process.
I object to the rules of the game, rules that allow very rich people to claim bankruptcy.
If you don’t comment you will help to put it to rest faster.
I’m sure she’s playing all the tax law angles by claiming losses etc. Not unlike her idol of orange fame.
I didn’t see this covered here:
Thank you, Noozhawk.
Bankruptcy Trustee Calls Santa Barbara News-Press Building Transfers a ‘Sham’
Complaint against Ampersand Publishing LLC asserts that properties should be used to pay off millions owed to creditors
A federal bankruptcy trustee has filed a complaint alleging that the property transfers of the Santa Barbara News-Press building in downtown Santa Barbara and the Goleta printing plant were “a sham,” and done only to prevent paying off a mountain of debt to former employees and to “defraud creditors.”
Jerry Namba, U.S. Bankruptcy Court trustee, filed the complaint against Ampersand Publishing LLC, parent company of the News-Press, late last month.
It alleges that owner Wendy McCaw transferred ownership of the News-Press building, 715 Anacapa St., a nearby parking lot, and the printing plant, 725 S. Kellogg Ave., in 2014 to purposely avoid paying off debts.
“Plaintiff is informed and believes, and based thereon alleges, that the debtor made
each of the subject transfers with the actual intent to hinder, delay, or defraud one or more of its creditors,” the complaint states.
The complaint calls the building transfers “a sham.”
The bankruptcy complaint contends that the News-Press building and the printing plant “are assets that the trustee can use, sell or lease. The court should order turnover of the office building and the plant to the trustee.”
The buildings could at that point be sold, with the proceeds used to pay off debts.
Ampersand also allegedly paid no rent for use of the buildings that it transferred, while charging other third-party entities rent.
Ampersand also owes the IRS about $135,000 in taxes on unpaid wages, the complaint states.
The complaint alleges that Ampersand was liable to the IRS for wage withholding taxes at the time of the office building and plant transfers in 2014, and that such taxes remained unpaid.
Ampersand filed for bankruptcy last July, and eliminated all jobs at the newspaper.
Former employees, represented by The Teamsters union, and other creditors are owed more than $5.13 million from labor case court judgments, according to public records.
Santa Barbara County Assessor’s Office records show that the Anacapa Street building has a 2023 assessed value of $15.2 million. The parking lot property across the street has an assessed value of $3.17 million.The Goleta property at 725 S. Kellogg Ave. is assessed at $11.59 million.
The complaint also alleges that Ampersand has not allowed the bankruptcy trustee access to either of the buildings to determine what other assets may exist.
Bankruptcy documents filed by McCaw’s attorneys listed more than $5 million in debt and few assets, including office furniture and some items of unknown value, such as the newspaper’s archives.
https://www.noozhawk.com/bankruptcy-calls-santa-barbara-news-press-building-transfers-sham/