More cuts, controversy at Creative Loafing Inc.

Wake up and good morning. The soap opera continues at Creative Loafing Inc., the Chapter 11 parent of the Tampa Bay alternative weekly by the same name and numerous other alt papers in Atlanta, Chicago and Washington. Now it has shown the door to its Atlanta paper's editor. According to the Atlanta Journal-Constitution, Ken Edelstein said he was fired Monday after 11 years as editor of Creative Loafing Atlanta.

In Tampa, Ben Eason, CEO of parent company Creative Loafing Inc., wrote in an e-mail, “This is a personnel matter that we’re working through. Luann Labedz, CL’s Publisher, will no doubt be looking for a new leader for the Loaf to replace Ken,” the Atlanta paper reported. Neither side indicated why Edelstein was dismissed, though blog postings suggest heated differences of opinion between the editor and publisher. More cuts — in advertising and other departments — were said to be on the way.

John Sugg, who Tampa Bay readers will remember as a long-time commentator on our metro area for Creative Loafing (and a former Tampa Tribune prior to that) before heading to Atlanta, left Creative Loafing last year after a 13-year run. He told the Journal-Constitution that the problems at the publication went beyond the state of the economy and the newspaper industry.

“The one thing that has remained stable at Creative Loafing Atlanta was Ken Edelstein’s leadership … even though he has gone through so many budget cuts. What’s been very clear is that corporate management has no concern for content,” said Sugg, who is a shareholder and still writes a weekly column. “As much as I disagree with what’s happening at Creative Loafing, it still makes me very sad to see it happen.”

An Atlanta Magazine blog posted Ben Eason's email to staff following the firing:

"Just wanted to send around a courtesy email to Publishing Teams. Luann let Ken Edelstein go this morning. I concurred in this decision and feel it best for the organization. Ken and I go back a long ways and he's a very talented person and we'll miss him. The decision to let him go was related to a personal matter that is best left private for all parties concerned. You can rest assured that CL doesn't operate in a capricious manner and that an employee of such tenure and talents would be given every benefit of the doubt to stay a part of the organization."

At the time of the corporate bankruptcy filing earlier this year, Eason said Chapter 11 would help the chain reorganize and improve its online business.

The filing may have stemmed partly from a dispute with lenders Atalaya Funding and BIA Digital Partners, according to court documents. The limited liability company and limited partnership lent Creative Loafing Inc. $40-million to pay down $15-million in debt and to buy Washington City Paper and Chicago Reader, which Creative bought in 2007.

In a recent dispute, Atalaya has objected (here's the court motion) to Creative Loafing's wish to hire Skyway Capital as an investment adviser in the bankruptcy. Atalaya's concerns: Skyway is conflicted and would be overcompensated. Stay tuned.

-- Robert Trigaux, Times Business Columnist