By: Mark Fitzgerald
One of the more unusual of the bankruptcies that have plagued the newspaper industry concluded Friday as the Columbian Publishing Co. of Vancouver, Wash. emerged from Chapter 11 protection after nine months.
“It was unusual in that most of our problems were created by the new building we had,” Scott Campbell, publisher of The Columbian, said.
The bankruptcy petition filed May 1 was triggered by a Bank of America lawsuit to foreclose on its $9 million loan on the downtown building. The financial drag of the new building forced the newspaper staff to relocate to its old, and cheaper, digs after less than a year.
Under the reorganization approved by U.S. Bankruptcy Court by Judge Paul Snyder, the newspaper will turn over the $35 million new building to Bank of America.
Unsecured creditors, who had claims of $25 million on the company, will be repaid, some in full and others in part. “We’re being told it’s pretty gentle (to creditors) in terms of how these things usually go,” Campbell said of the repayment plan.
In another contrast with other newspaper bankruptcies, the Columbian did Campbell said the paper did not have big debts with vendors and others with a claim on its accounts payable.
“We weren’t stretched out on our creditors in the first place — except for the bank,” he said. “Some of these bankruptcies, the companies are out 60 or 90 days with a whole huge lot of their creditors. We were current with practically everybody.”
The Columbian’s expenses had already been cut before the emergence from Chapter 11 with measures that included three layoffs that shrank the staff to 237 from about 350. The smaller staff is comfortable in its old home, which has had its infrastructure upgraded.
Business is definitely improving, Campbell said: “We’re seeing a pulse out there. We’ve stabilized, and we’re hitting our budget every month. We’ve reduced costs to where we’ve digested the loss to Craigslist and some other structural things, and we’re ready for the economy to rebound.”