The owners of Orange County Business First consented Wednesday to the liquidation of the bankrupt newspaper, acknowledging it was unable to work out a sale agreement for court approval.
U.S. Bankruptcy Court Judge John J. Wilson ordered the liquidation because the paper's owners, an Irvine partnership called Orange County Businessweek, has not been paying off old debts, continues to lose money and has not filed a sufficient reorganization plan.
The liquidation, which involves the sale of all assets to pay off creditors, means the loss of jobs for nearly a dozen employees of the weekly publication.
"We're packing things up now and going," said a dejected Alice Widdess, the newspaper's circulation manager. "We're all out looking for jobs."
She said the employees had been working up to 12 hours a day in an effort to keep the paper afloat. "You get attached to the paper," she said.
The paper's failure reflects the competitive market for business news in Orange County. Business First was one of several business publications in the county, and general interest newspapers have increased the scope of their business coverage in recent years.
The paper's problems were aggravated by a lack of adequate financing, according to the partnership.
The last edition for Business First was its June 12 issue. More than 24,000 copies were distributed, but only about 5,000 were sent to paid subscribers. The rest were free subscriptions, Widdess said.
The partnership filed Nov. 2 for protection from creditors under Chapter 11 of the federal bankruptcy laws, which allowed it to continue operating the newspaper as it tried to come up with a plan to pay off creditors.
Court documents show that the partnership has $1.3 million in debt and only $169,000 in assets.
Based on those figures, creditors would get 13 cents on the dollar at most in a liquidation. That's more than most liquidations produce, said Arthur N. Marquis, a U.S. trustee on the case. The trustee's office, which reviews reorganization plans for the court, had recommended that the partnership's petition be converted to a Chapter 7 liquidation.
Since its filing, the partnership has been losing more than $30,000 a month for a total loss of $246,000, court documents show.
On Monday, James H. Smith, a managing partner, said his firm would be seeking court approval for the sale of the company. He said details would be provided Wednesday.
But Marquis said that a lawyer for the partnership, Pamela Rae O'Mahony of Orange, told him that Businessweek had no objections to the trustee's request to liquidate the firm. She could not be reached for comment Wednesday.