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Salon Media Sold After Facing Imminent Bankruptcy and Liquidation

Accepted submission by takyon at 2019-05-15 17:07:20

Salon Media Announces $5 Million Sale, 'Bankruptcy and Liquidation' Threatened If Deal Fails []

Salon Media says they have reached an 11th hour deal to sell the company and its flagship property for $5 million. In an SEC filing [], Salon also revealed its position was dire and that it would face imminent "bankruptcy and liquidation" if the deal should fall through.

[...] The company buying Salon was named only as LLC and appeared to be getting an even better deal than the top line figures first suggest. To complete the sale, the buyer need only pay $550,000 at closing, with an additional $100,000 left in an escrow account. The filing also showed that a deposit of $500,000 had already been paid.

[...] Though it was once a powerful force in the early days of internet blogging and a prominent incubator of talent, the website has fallen on hard times in recent years. On May 3, the filing revealed, CEO Jordan Hoffner departed the company. Salon's longtime chief financial officer, Elizabeth Hambrecht, also jumped ship last October.

[...] The company's troubles, however began long before and were documented in detail in a 2016 Politico Magazine story [], which revealed that for years Salon — deeply unprofitable — had been kept afloat by elderly benefactors, John Warnock, a co-founder of Adobe, and Bill Hambrecht a venture capitalist. The two are now 78 and 84 respectively.

"Because Salon has run deficits for almost every quarter since it was founded, the company has relied on regular interest-free cash advances from Warnock, chairman of Salon's board, and Hambrecht, a board member," Politico wrote at the time. "From Salon's founding until the end of 2015, the most recent data available, Warnock and Hambrecht have given the company nearly $20 million in cash advances, and Warnock also personally guaranteed a $1 million line of credit."

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