Can anyone explain this cartoon to me?

george11c said:

It's going bankrupt anyway. It's a pretty crappy cartoon if you judge it based simply on its artistic and creative merits.

http://news.fredericksburg.com/newsdesk/2014/01/23/the-free-lance-star-files-for-bankruptcy/

Click to expand...

Yes, but they'll stay in business. And to be fair, that is a good thing. Aside from two or three folks on the wacky side (including this cartoonist) - and a few bad decisions along the way, it's really a good paper. There are many similar sized outfits that are horrible all around. Their editorial page is vastly improved over what it used to be.

Their bankruptcy is due to a poorly timed expansion right as the print industry started to collapse. Due to what I suspect are government regulations on the banking industry, the large loan they had for their expansion went "out of conformance" when their income levels dropped. So, even though they cut costs and didn't miss even one payment, they called in the loan and forced the bankruptcy. One more "win" for government regulation.

TFred

george11c said:

It's going bankrupt anyway. It's a pretty crappy cartoon if you judge it based simply on its artistic and creative merits.

http://news.fredericksburg.com/newsdesk/2014/01/23/the-free-lance-star-files-for-bankruptcy/

Click to expand...

marshaul said:

I love watching the statist old media writhe in their death throes.

They so deserve it...

Click to expand...

The Free Lance-Star is neither "going bankrupt" nor in their "death throes."

Very few people outside of the commercial real estate and investment community understand typical/standard terms in commercial lending documents of this nature.

It would seem that the FLS was in fact up to date (even ahead) on the repayment of the note. Where there was a default was in market conditions (part of the mandated stipulations in the loan) whereby the loan could be called/accelerated (100% due and payable now) - that may be a technical point, but perfectly legal and enforceable.

The FLS had responded to the need to protect their liquidity (expense vs income) by reducing their overhead - as a result, they continue to satisfy the companies bills in a timely fashion.

In essence, what we have here is not dissimilar to the results of a hostile takeover. In this case, an investor bought (below par) a note in technical default of a company with an ability to operate within the parameters of its income and expenses and then is causing the sale of that company under Chapter 11, through the opening provided by the change in those market conditions. I have every expectation the FLS will be allowed to continue in operation by the bankruptcy judge and that the new note holder will ultimately end up in an ownership position. The only thing that will likely change is the name of the owner(s).

As an entity/business in Frederiksburg, I do not see any changes that will affect the way they operate nor be noticeable to the public.

The alleged death of the Free Lance-Star is decidedly most premature.