To begin, many know my brother Steve, the current owner of the Weekly, as a wine importer, attorney, or art collector. Most do not know about his years of experience in the alternative newspaper business. The whole reason Steve became an original part owner of Magnolia Media, the company that used to publish the Birmingham Weekly, is that he ran the predecssor publication for two years after our brother Bobby, the original owner, died suddenly.
I just as suddenly found myself in the role of the administrator of an estate in which the paper had no value unless it continued to operate. Out of respect for our brother, Steve agreed to try and keep the paper going until a purchaser of the assets could be found. Steve was well qualified to fulfill this role, though he was also working at a major law firm in town in support of one of the partners who was himself serving as President of the American Bar Association. Steve has a strong writing background, having spent two years teaching literature in Tuscaloosa at UA while working on an MFA. While an undergrad at Princeton, he won both the Ward Mathis and F. Scott Fitzgerald Prizes for writing. His first job out of college was working for Creative Loafing in Atlanta as a writer and editor. His writing in Atlanta caught the attention of a candidate who won the Senate race and he was asked to come to Washington as the speechwriter for that U.S. Senator from Georgia. He later wrote for Gore and Clinton.
While he was working in Washington and traveling to Iraq and Cuba on government business, he was also attending law school at the University of Georgia, where he earned summa cum laude honors, and graduated number one in his class. He continued improving his skills while writing for the Law Review. Frankly, there is no comparison to the critics who by their own admission were originally hired without any experience.
During the time Steve kept the paper going, many predicted that it would fold any minute. Most of the predictions were from those who were attempting to establish competing publications. As the administrator of the estate, I made reports on how Steve and I worked without pay to handle the estate and run our brother’s business on behalf of Bobby’s children. In fact, the paper was part of the assets presented in a public probate hearing where creditors and interested parties were present, and represented by counsel. The estate was carefully scrutinized by a judge. When Steve arranged to sell our brother’s paper to Creative Loafing in Atlanta, the proceeds went to Bobby’s boys, a matter that was also overseen by the probate court.
Due to his experience, which was much more extensive than working at a law firm, Creative Loafing made Steve’s continued involvement part of their deal to buy the assets of the paper. Later, when Creative Loafing Birmingham merged with the Birmingham Weekly, Steve became a minority member of Magnolia Media, the company that previously published the Weekly. The board of Magnolia Media consisted of Chuck Leishman, the majority member and managing member responsible for the day to day operations of the paper, Creative Loafing represented by its CEO Ben Eason, and Steve. Ben and Steve loaned money to the company at the request of its managing member. The loans were secured by the assets of the company. The loan agreement was willingly entered into and was written by a prominent law firm in Tampa that represented Creative Loafing. Ultimately, as a secured creditor, Steve received the assets of the Weekly, leaving Magnolia Media to resolve its own claims. To keep publishing the paper, he established a new company.
The new company is completely separate from Magnolia Media, which retained one of the business lines of the old company, the Weekly card program. Magnolia Media and its former employees are responsible for all obligations under the card program, including obligations to cardholders and tax obligations for trade used for personal purposes or taken in lieu of salary. Some have questioned how the new company could acquire the assets of the Weekly. There was no magic, and certainly nothing improper, about taking the assets that secured a loan when the loan and interest on the loan were not paid. Unfortunately, this common right of secured creditors has been questioned by former employees who left to start their own competing publication. They also fail to understand that minority shareholders are not responsible either for the liabilities of the company or the actions of the majority shareholders.
The loan for which the assets served as collateral was the subject of UCC filings of security interests that are a matter of public record, and was reviewed by one of the top law firm’s in Birmingham prior to my brother enforcing rights under the agreement. This has not been publicized because my brother has avoided showing any disrespect to the previous owners who were not able to fulfill their desire to end up with no loans and a financial success.
Finally, there was nothing clandestine about the departure of an editor who worked for the previous company. The former employee of Magnolia Media was never hired full-time during the so far brief existence of the new company. The former workers were told that they could free-lance as independent contractors until permanent decisions were made. The person providing editorial support obviously understood what that meant because he provided independent services to other publications. His own statements show that he had an interest in finding a position with another publication. We hope he is able to do so. The former editor has no knowledge whatsoever of the Weekly’s finances with which to speak.
The focus is now on efforts to honor the memory of our brother Bobby. We are happy to see the paper return to its origins. As things settle down, the hope is that there will be transparency and a platform to serve the greater Birmingham community.