‘Santa Barbara News-Press’ Back in Court

Wendy McCaw was not in court on Tuesday for the scheduled contempt hearing in the Ampersand Publishing bankruptcy case, nor were any of the attorneys involved. Bankruptcy Judge Ronald A. Clifford III was present, however, asserting more than once to the attorneys visible on video screens that the issues at play should not need his assistance to work out.

“There are four bullet points,” Judge Clifford repeated several times. “That should not be a lot of work for the attorneys here to resolve.”

He was referring to bankruptcy trustee Jerry Namba’s attempts to liquidate what remains of the Santa Barbara News-Press, the city’s daily paper for more than 150 years. McCaw, who bought the paper in 2000, declared Chapter 7 in July 2023. Since then, Namba has attempted to get possession of the building’s keys long enough to do a complete inventory and hold an auction. He was constantly foiled until he finally brought a contempt motion this March.

The attorneys clearly disagreed that a resolution would be easy or simple. But what only remained to be worked out, as Judge Clifford enumerated, were access, key exchanges, when, and by whom. The judge added that he thought the requirement to list the names of all going into the buildings seemed onerous to him. And the litigants had already agreed that administrative expenses would include the rent payments McCaw had asked for, which was more about paying for utilities and any liability issues, the judge said. (SoCal Edison, which is owed $176,900, will turn the lights back on temporarily in such cases, a utility rep said.) “Why am I here?” Clifford asked once again, and wondering aloud whether he had a lawyer or a client problem.

During the arguments, Michael D’Alba, who represents the bankruptcy trustee, stated McCaw’s attorney had prevaricated about the insurance information. When her attorney, Zach Elsea, began to object, Judge Clifford observed that on the face of it, the insurance seemed to be the typical umbrella policy commonly used in bankruptcy cases. Elsea assured the court the insurance issue could be resolved: “No one is trying to hide the ball from Your Honor.”

Time was of the essence, D’Alba indicated. Among the facts set out in a declaration by the former director of operations for the paper was that its two buildings — the historic one on De la Guerra Plaza in downtown Santa Barbara and the printing press structure in Goleta — no longer carried insurance. This concerned the trustee, D’Alba said, as the newspaper’s physical archive was fragile. The old building downtown was said to leak and the microfiche, he had been informed, needed to be refrigerated. (D’Alba also specified that the archive is not part of the auction, nor were some pieces of industrial equipment that had been “taken off the table.”)

D’Alba urged the judge to set a short continuance or rule on the motion for contempt — which asks for attorney fees and the costs incurred in “compelling access” to the buildings to complete the auction.

Judge Clifford gave the attorneys until Friday, May 24, to put the four bullet points onto paper. The next contempt hearing takes place then, when Clifford will be at a special hearing in Santa Ana. “If the attorneys reach a stipulation prior to that hearing in Santa Ana,” he said, “you can file it with the court and vacate the hearing.”