L.A. Weeklies File For Bankruptcy p.18

By: M.L. Stein Wave Community Newspapers, a Los An-geles-area group serving black, Latino and Asian neighborhoods with 39 twice-weeklies, has filed for Chapter 11 protection from creditors while it restructures and becomes partly employee-owned. Meanwhile, executive editor and publisher Art Aguilar said in an interview that publication is continuing uninterrupted. Under the reorganization plan, he added, the number of employees actually will increase, to 250, from 80, over four years.
Wave papers, published by Central-News Wave Publications and affiliate Eastern County Newspaper Services Inc., face $1.4 million in debts. According to the Chapter 11 filing last month, Wave hopes to pay off the debts and make capital improvements with a $3 million loan being sought from the Los Angeles Community Development Bank. Aguilar blamed a three-year retail advertising slump, adding, "We are doing all right in national advertising, but the economic boom has not yet trickled down to the small merchants in our circulation areas."
Both operating companies are owned by the Brian Hews family, which would have no role after the restructuring, Aguilar said.
Wave president and CEO Dr. C.Z. Wilson said the company has begun a reorganization designed to make employees the largest shareholders, with about a 40% stake. Senior managers and community leaders also will have a stake, he said. Wave distributes about 500,000 free copies in the South Central and Southeast Los Angeles area.
Executive publisher Ric Trent said there are more than 4 million people in the service area, and less than 15% receive a daily paper at home, so the Wave is the only way for businesses to reach consumers in the neighborhoods. Aguilar said immediate plans call for adding special editions on health care, employment, business development and family financial planning.
Spokesman Robert Alaniz said a loan was under consideration by the bank, an agency involving the city of Los Angeles, Los Angeles County, and the U.S. Department of Housing and Urban Development. He declined to speculate about ownership if the loan is made.
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?(Copyright: Editor & Publisher August 1, 1998) [Caption]


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