‘Santa Barbara News-Press’ Website Goes to ‘Local Kids’

The auction of the online archive of the Santa Barbara News-Press moved slowly late Tuesday afternoon, as three bidders — two local, one from Europe — went up in $5,000 increments. The winning bid went to NP 2024 LLC, a group that formed just last week, according to its manager Ben Romo, at $285,000. But that was in the waning minutes of a long bankruptcy court hearing, during which the judge made clear his displeasure that key assets were being held “hostage” in the deal.

When the News-Press abruptly declared Chapter 7 in July 2023, the employees were let go with a “you’ll see your paycheck when the bankruptcy ends” email from their editor. Owner Wendy McCaw, however, had made a practice of having employee Phil Kiner use his own credit card and username to maintain the website that was on auction April 9. Employee Yolanda Apodaca also created log-on information in a similar way for the website.

Bankruptcy estate attorney Michael D’Alba acknowledged it was all somewhat “unsavory,” but the judge disagreed: “That’s not how it comes off to me,” said Judge Ronald A. Clifford III, who wore a deep-red bow tie and a flinty manner with his black judicial robe. He said that Kiner and Apodaca wanted to be paid their wages or reimbursed for expenses by holding the assets of the estate hostage and jumping the line in front of their colleagues who were not being paid.

But for the bankruptcy filing, the employees would have been paid back by their employer; however, Kiner had paid the August website fee before losing his job in July, D’Alba explained. Kiner, who was present in the courtroom, had also made a copy of the website. If he hadn’t, it would have gone into the dustbin, D’Alba said.

Judge Clifford then questioned the website value and asked why no information was given on how the asset was marketed, calling the bid information “thin.” D’Alba explained that the estate had no assets to spend on marketing, but that 10 publications, two hedge funds, and four people who’d made inquiries had been sent the offer of sale. As well, D’Alba noted an opinion article in the Santa Barbara Independent had “described the sale in some detail and the risk of the assets being placed beyond the community.”

The judge commented that the piece did not cast a favorable light on the sale, which D’Alba countered by noting that it had produced results. Indeed, after the hearing, Ben Romo — who owns Romo and Associates consulting firm and has handled a number of high-stakes deals from La Cumbre’s planned 642 rentals to downtown’s Sur la Table’s transformation into 14 studios — praised Will Belfiore, who had written the March 29 editorial with his cousin Zach Grimshaw. Romo’s LLC, which he described as “local kids who care about our history,” had already been interested in the sale, “but having them explain it the way they did,” Romo said, pausing, “We are lucky to have someone step up like that, heart and soul. It definitely got us more interested.”

The bankruptcy court’s three-hour session on Tuesday saw Judge Clifford dispense with about a dozen cases. Amid his day in, day out considerations, he said, it gave him heartburn to consider compensating Kiner and Apodaca in a manner outside bankruptcy procedures. He said he was not willing to bend when other wage earners might not get paid.

All the creditors could, in fact, be paid in full, D’Alba told the judge. “The debtor squirreled away her most valuable assets” before the bankruptcy petition was filed, he said, referring to the lawsuit he and trustee Jerry Namba have filed against McCaw, who transferred ownership of two buildings from the News-Press to herself in 2014 without compensation.

The judge consented to hold the auction, with the first bidder, Weyaweya’s Max Noremo on the phone, and Romo and Clancy Woods in the courtroom. When Woods expressed concern that the court would not be able to really deliver the goods, Judge Clifford mused that the two employees could be “incentivized in serious ways” — following due process, of course — that involved taking away their liberty if they were found in civil contempt, i.e., jailed.

To deal with the judge’s heartburn, Romo’s attorney, William Beall, said his clients offered to pay Kiner and Apodaca’s claims as an act of charity. To ensure the buyer ended up with the goods, D’Alba said he would verify the log-on information and web content after buying out Kiner and Apodaca’s claims. The purchase of the website included the Santa Barbara News-Press trademark, which would be important to the groups looking at the physical archive of back issues, photographs, and clippings by topic. Romo, who was once a paper boy for the daily, acknowledged that his group was supportive of the archive remaining local, too.