‘Santa Barbara News-Press’ Owner Wendy McCaw Questioned During Bankruptcy Proceedings

After swearing in Wendy McCaw, the owner of the bankrupt Santa Barbara News-Press, the trustee in charge of the bankruptcy proceedings and his attorney asked a series of questions over the telephone on Thursday afternoon in an attempt to find out where all the company’s money might be, or any assets that might pay the hundreds of creditors that the paper’s failure has left in its wake. McCaw’s answers were mostly “I don’t know,” giving the impression she’d been hands-off in most practical matters of the daily operations, if not in causing the failure of the 150-year-old daily.

McCaw bought the News-Press from the New York Times Company in 2000, paying an estimated $110 million for Santa Barbara’s only daily in pre-digital times. Twenty-three years later, with subscriptions dropping from 45,000 when she bought the paper to fewer than 800, she threw in the towel, filing for Chapter 7 bankruptcy on July 21, a date she had to ask others to provide for her during the creditors meeting. 

When McCaw precipitated a newsroom revolt after favoring a friend, actor Rob Lowe, and chastising a reporter and editors for running the address of a Montecito property he was developing, more than half of the subscribers to one of the oldest newspapers in the country canceled in a protest and to show their support for the staff. Reporters, editors, and columnists had quit in disgust and over the ethical compromise they were placed in; others were fired for their union activities.

Among the assets the bankruptcy trustee, attorney Jerry Namba of Santa Maria, had searched for were artworks listed in the initial bankruptcy documents with a value of $26,000. McCaw stated a valuation had been done in 2003 and that perhaps 50 artworks existed, some of them moved from the downtown Santa Barbara building to the printing press plant in Goleta. When Namba said they’d found three drawings by Western artist Ed Borein, McCaw said she thought there might have been five or six. Some of the art was affixed to the walls of the downtown building, she said.

An arguably priceless asset would be the collection of newspapers from the News-Press’s history. McCaw did not know where they were, if they were protected in any way beyond their binding, or if anyone had been recently in charge of the archive. Asked where photographs might be, McCaw replied, “I’m sure the photographs must be someplace. I don’t know where. I assume they’re there someplace.” Nor did she have any idea of who might know, since “the photo department wasn’t there after a certain point.”

Former employees who might know answers to the questions asked by the trustee’s attorney, Michael D’Alba of Danning Gill in Los Angeles, might not respond, said McCaw’s attorney Anthony Friedman. They’d tried to reach Yolanda Apodaca, whom McCaw indicated might know about the move, payroll, contracts, or records, but the email had bounced back. Friedman added that Apodaca was likely to file an administrative wages claim, as she, too, did not receive her last paycheck.

McCaw seemed unbothered to admit that she knew few facts about the paper’s operation, such as employees’ names or why they might be owed hundreds of thousands of dollars, if the paper was on social media, or who her print customers were, with the exception of the Montecito Journal. She did recognize the name American Travel Media, which is owed $390,000 in wages. The corporation is Arthur von Wiesenberger, she said, an employee. Von Wiesenberger, also known by his nickname Nipper, was co-publisher with McCaw and is also her longtime fiancé.

Regarding the real property downtown and in Goleta, McCaw knew Ampersand Publishing paid no money or other compensation to her for use of the buildings or the parking lot. Asked if she knew what the debtor — Ampersand Publishing LLC — had paid the New York Times Company in 2000, McCaw stated, “The buildings, the printing plant, the printers, it was all part of a big, um, purchase.” After that non-answer, D’Alba began asking about the transfer of title on the two properties in 2014 to two limited liability companies wholly owned by McCaw. She answered “no” to questions asking whether she remembered what was paid for the office, the parking lot, or if any consideration was given at all. Her attorney objected, asking what relevance a 10-year-old change in title might have on this case; D’Alba soon concluded his questions.

Among the creditors on the phone on September 7 was an attorney for the National Labor Relations Board (NLRB), which had found against McCaw for bargaining in bad faith with her employees’ union. Her publishing company, Ampersand Publications, owes them nearly $3.5 million since the 2017 judgment was entered for McCaw’s bargaining unfairly, refusing to give raises, and hiring temps to fill in for reporters. Questions from the NLRB attorney about Ampersand’s relationship with Stanford Farms Trust and Georgetown Aviation were the only questions that McCaw was unequivocal about: “I’m not going to answer that because I don’t know.”

The newspaper’s subscription list is an asset that the trustee was trying to gain access to, as was a buyer apparently interested in the historic record of 45,000 subscribers. They concluded it was on a server that employees might know the password to, and the trustee added that to the long list of questions that remain to be answered.

A second creditors meeting was set for October 19 at 1 p.m. Trustee Namba stated creditors could contact his office a few days beforehand to receive meeting information.