In year three of the bankruptcy of Ampersand Publishing and the Santa Barbara News-Press, the testimony of the witness-in-chief — owner and publisher Wendy McCaw — hit the deposition doldrums. Her original attorneys had quit when she wouldn’t reply to their requests to confirm a date to give her testimony, but the date was set, and McCaw was told. When the bankruptcy trustee’s attorneys showed up, they waited for a witness who failed to appear.
These facts were in the Motion to Compel that the trustee’s attorneys brought in order to force McCaw’s deposition appearance. It also requested attorney fees and costs and was heard before Bankruptcy Judge Ronald A. Clifford III on October 7. The motion listed in detail the communications between the parties and the attorneys past and present, as the trustee’s attorneys asked for about $25,000 in payment for their wasted effort. Clifford allowed about $8,500, stating the overnight stay, half the travel, and the preparation time were not warranted; after all, they did finally take McCaw’s deposition in Santa Barbara in April and would have visited the properties anyway.
The bankruptcy of Santa Barbara’s century-old daily newspaper left debts in the millions of dollars but assets only in the thousands. The trustee is still trying to establish who knew what about the company’s finances, with the deposition of the company accountant and “person most knowledgeable” about company finances yet to come, as is the final production of the documents requested. After all that, McCaw’s deposition may occur again — in Los Angeles, not Santa Barbara, Clifford specified, to avoid further travel charges. Once all documents are produced and the other depositions taken, questions may remain for McCaw, though her answers so far have largely stated she knew little about the day-to-day operations of Ampersand.
All this precedes the trial, which will determine if the News-Press building in De la Guerra Plaza and the printing plant in Goleta belong to the bankruptcy estate — and can be sold to pay the creditors — or to McCaw, who transferred ownership of the buildings from Ampersand to herself in 2014, not long after the National Labor Relations Board (NLRB) found for the News-Press union and against McCaw for labor violations. The NLRB filed a creditor claim in the bankruptcy in the amount of $3.6 million.
In the NLRB case, which is still ongoing all these years later, the board found in June that McCaw is personally liable — as are the Ampersand, Kellogg, and Anacapa LLCs as employers — for the debt to former employees, “piercing the corporate” veil that normally protects individuals from the liabilities of their companies. McCaw did not reply to those pleadings and was subsequently the subject of a default judgment. The NLRB seems intent on pursuing enforcement of the judgment — the same amount in the creditor claim, plus interest, and less state and federal taxes — in the 9th Circuit Court of Appeals.
During Wednesday’s hearing at the bankruptcy court, a trial date in Santa Barbara was set for April 14, 2027. Before that, dueling Motions for Summary Judgment will either curtail the number of issues to be tried or eliminate them altogether. That outcome remains to be seen, with the motion date set for January 27, 2027.
