The bankruptcy of the Santa Barbara News-Press took a turn for the weird, if not the unexpected, when the attorneys for Wendy McCaw, publisher of the defunct print daily, asked the judge to allow them to withdraw from the case. “There has been an irremediable breakdown in the attorney-client relationship and a complete breakdown in communications between counsel and clients,” wrote Zachary Elsea of Eisner LLP on February 13. One week later, Elsea informed the court that he was leaving the law firm as well.
In the request to withdraw, Elsea wrote that an issue with McCaw had existed for “some months.” Listing individual dates, he said his firm had attempted to contact McCaw nine or more times for a deposition date to allow opposing counsel to ask her questions. His client never replied. Elsea said he and his partners decided they could “no longer effectively represent” McCaw.
The breakdown in communication is not surprising. During the 2024 meeting of creditors that McCaw attended as sole owner of Ampersand Publishing LLC, the daily newspaper’s former publisher, her two interviews paused repeatedly as she asserted that she knew little about the running of the business or its assets; she told the attorneys to ask her former employees. The interviews, conducted with phone lines open to creditors and journalists, foundered on questions about Ampersand Publishing’s finances. The creditor meeting came to a formless end, and any interview with her accountants is not in the record.
McCaw has asked for a jury trial in the adversarial case, and her deposition would give the bankruptcy trustee, Jerry Namba, information in his pursuit of funds for the creditors. Namba alleges that McCaw transferred two major assets — the white elephant headquarters on De la Guerra Plaza and the concrete-block printing press plant in Goleta — to two limited liability companies (LLCs) she wholly owned and that both buildings belong among the bankruptcy’s assets. McCaw is named personally in the lawsuit, as are the two LLCs. The allegations add that she breached her fiduciary duty to all owners of the buildings — as bankruptcy trustee, Namba is, for all purposes, Ampersand Publishing LLC dba Santa Barbara News-Press. McCaw’s answer to Namba’s complaint generally denies the allegations.
Valued somewhere around $30 million, the two real properties would add substantially to the dry bank accounts left at the time of the Chapter 7 filing in 2023. Hundreds of creditors — including employees, subscribers, and vendors — are owed monies that total into the millions.
For Namba, changing attorneys was fine, as long as delays didn’t ensue. He asked the judge to set a deadline for McCaw to hire a new attorney. Then there’s the matter of the motion to change venue.
During the summer of 2025, the air conditioning units broke down at the Santa Barbara bankruptcy court. Built in 1945, the building was home to an I. Magnin high-end clothing store until it closed and McCaw bought it in 1995. Amid last year’s heat, a dispute about withholding rent was discussed during a facility security meeting, and an email “containing private information concerning a judge in this court that was not intended for public disclosure” made its way to the landlord, McCaw’s attorneys wrote. This prompted them to give notice for a venue change but with a request to allow them to redact any sensitive information. The bankruptcy judge, the Honorable Ronald A. Clifford III, reacted strongly to the fact that court security information was in their hands, but he agreed the motion could proceed. Eisner has not filed it to date.
Judge Clifford has ruled that the Eisner firm may withdraw. He has also sent to all parties an Order to Show Cause as to why he should not call a default judgment against the “entity defendants.” Because the two LLCs are not people and cannot represent themselves, they must have an attorney. If a default is entered, it would be game over as far as the LLCs are concerned, but only until their principal, McCaw, found new attorneys.
Clifford has ordered the LLCs to appear in his courthouse on March 25 to answer to his default proposal. According to the case filings, no attorney of record yet exists for them.
