Papers filed Friday with the U.S Bankruptcy Court in Los Angeles identify the buyer as Michael A. Turner, who has established a company called New Frontiers Media Holdings LLC, through which to make the investment. Turner, an investment banker in Los Angeles, is a former partner in the Courtney Group, where he worked with Sam Leslie, one of Frontiers’ largest creditors.
Turner’s New Frontiers Media Holdings will be paying $361,000 for Frontiers, a free-distribution magazine published biweekly, along with its website and other assets. The purchase will close by Dec. 31 unless another party comes forward with a bid of at least $10,000 more.
The purchase is likely to end an uncertain nine months for Frontiers, which filed for Chapter 11 bankruptcy protection on March 6, stating it had debts of $3.2 million and only $58,000 in cash on hand. In October, Frontiers said it had been unable to negotiate a reduction in the $2.2 million debt it owed its two largest creditors — Wells Fargo and Frontiers Publishing LLC. However, it announced that Noble Media Ventures, a company that helps owners refinance and sell their businesses, had come forward with a proposal to buy Frontiers through a so-called “special purchase entity,” a way of owning Frontiers without exposing Noble to any financial risk, and seek investors in that SPE. One prospective investor, Adam Levin of Vert Capital, backed off from a deal earlier this month. The Turner investment will be through an SPE.
The purchase is likely to be approved by Richard Neiter, the judge overseeing the Frontiers bankruptcy, because Wells Fargo, Frontiers’ largest creditor, which it owes $1.3 million, and Frontiers Publishing LLC, the second largest creditor, which it owes $953,000, have finally agreed to the plan. In a court filing earlier this month, Frontiers Media proposed paying Wells Fargo $140,000 and Frontiers Publishing $95,000.
Sam Leslie said he wasn’t happy about receiving only about a tenth of what he is owed, but that he didn’t see another viable option. Leslie said he had brought the Frontiers asset sale to Turner’s attention.
Frontiers Publishing sold the magazine in 2007 to David Stern and his business partner, the late Mark Hundahl. Its revenues have been on a steady decline in recent years, going from a reported $3 million in 2010 to $2.7 million in 2011. Profits have taken a big hit this year, with Frontiers reporting losses most months, including $42,000 in October.
The magazine, which distributes 30,000 free copies every two weeks across Southern California, is an important institution in West Hollywood, a city where 40 percent of the population identifies as gay. Its content is a mix of LGBT news and entertainment coverage. Major advertisers include car dealers, health services providers and providers of “adult” services such as massages and escorts.