Orange County Businessweek, a limited partnership that owns the weekly Orange County Business First newspaper, has filed a bankruptcy petition to protect itself from creditors while it searches for money to refinance its operations.
The Chapter 11 filing in U.S. Bankruptcy Court in Santa Ana did not state the assets and liabilities of the Irvine firm, but it disclosed that the publication’s three largest creditors--its printer, accountant and landlord--were owed a total of $106,000.
The operators “misjudged their capital requirements” when they started the weekly 2 years ago, said Pamela O’Mahony, the firm’s bankruptcy lawyer. But the paper has been growing rapidly, she said, and should have a reorganization plan ready in 2 months.
James H. Smith, who heads the Businessweek partnership, said he expects to get funding within three weeks, pay off all creditors in full and drop the bankruptcy action. He said the paper has a paid circulation of about 25,000.
O’Mahony said the firm is considering an investment by an individual who has indicated that he is impressed with the paper’s growth in the county and wants to become a limited partner.
She said a number of factors contributed to the need to file for reorganization on Nov. 2, but the overriding concern was to gain more time to come up with a plan to reorganize the firm.
Among the biggest creditors is Anza Management Co. in Irvine, which is owed $30,000 in back rent, according to the bankruptcy filing. Yvonne Freeman, an Anza property supervisor, said her company had moved to evict Businessweek before the Chapter 11 petition was filed.
The bankruptcy petition listed Businessweek’s biggest debt as $46,312 owed to California Offset Printers Inc. in Glendale. John Hedlund, president of the printing company, said Businessweek owes about two months’ worth of printing costs.
Businessweek also owes $30,000 to its accounting firm, Wright Ford Stampe Certified Public Accountants Inc. in Irvine. None of the accounting firm’s partners could be reached for comment.