The latest on collecting the SF Weekly's debt


By Tim Redmond

The Bay Guardian has moved a step closer to enforcing a $21 million judgment against SF Weekly and its parent company.

A California judge ruled Jan 4th that the Guardian may tie up the assets of the Village Voice Media chain. Commissioner Paul Slavit granted the Bay Guardian’s motion for an order charging the interests of the various Village Voice newspapers with liens.

The lien affects 16 companies nationwide, including the LA Weekly, Minneapolis City Pages, Denver Westword, Kansas City Pitch, Miami New Times, New Times Broward-Palm Beach, Phoenix New Times, Riverfront Times, Ruxton Group, Seattle Weekly, Lancero Associates, Dallas Observer, Houston Press, OC Weekly and the flagship publication The Village Voice.

The ruling creates additional opportunities for the Bay Guardian to collect the money. Attorneys for the Bay Guardian will next be exploring the possible sale of one or more of the Village Voice chain’s newspapers, the appointment of a receiver to take control of the companies, and the possibility of placing the Village Voice chain into an involuntary bankruptcy proceeding.

"We are very pleased with the order and will press on aggressively to collect the money owed us as a result of the SF Weekly's illegal below-cost sales campaign aimed at putting us out of business," said Bruce B. Brugmann, editor and co-publisher of the San Francisco Bay Guardian.

The judgment stems from a 2008 verdict in a Guardian lawsuit charging SF Weekly and its owner with selling ads below cost in an effort to harm a locally owned competitor. After a six-week trial, a San Francisco jury awarded the Guardian $6.3 million, which Judge Marla Miller increased to $15.6 million. With attorney’s fees and accrued interest, the judgment is now worth close to $21 million.

The Weekly and VVM have appealed -- and in most cases, collection efforts would be delayed until after the appeal. But most defendants post an appeal bond -- in essence, a guarantee that the judgment will be paid after the appeals are exhausted. VVM hasn’t done that -- and instead has sought ways to avoid payment.

The Guardian previously seized SF Weekly’s vehicles and the rent that its subtenants pay.

Part of the evidence introduced before Commissioner Slavit was a chart that shows the structure of Village Voice Media. You can view it here (PDF).