Los Angeles magazine’s $5.3 million purchase of its competitor Buzz is set to close on May 31 in a deal approved this week by a bankruptcy court judge.
There were no other bidders for Buzz’s assets at Wednesday’s court hearing, the last opportunity to snap up the mag’s subscription list, logo and other possessions.
“All is proceeding smoothly and we anticipate no hitches,” said Buzz attorney David W. Levene, who says that the purchase price should satisfy all known claims against the magazine and leave some money for the small group of shareholders who have stakes in the company.
“The intention is that all creditors will be paid, we believe, to the extent that they have valid claims,” Levene said. It could take several weeks after the closing to pay magazine’s debts, he said. Buzz, plagued by red ink since its launching in 1990, announced on April 28 that it would cease publication with its June edition and file for Chapter 11 protection from creditors.
The magazine’s owners spent millions over the years to keep Buzz alive. The biggest investor was Thai media magnate Sondhi Limthongkul, who is believed to have plowed $15 million into Buzz before backing out last fall during the meltdown of Southeast Asia’s economy.
Current majority owners Parvinder and Sharon Chadha reportedly spent $2.5 million for their share last year but failed to see profit. The Buzz closure left about 40 people without work. Los Angeles mag’s parent company is New York-based Fairchild Publications — acquired by Walt Disney Co. when it took over ABC/Capital Cities — which also puts out W and Women’s Wear Daily.