EBONY and Jet magazines forced into bankruptcy
23rd August 2020 · 0 Comments
(Special from The Chicago Crusader) — EBONY and Jet magazines were forced into involuntary Chapter 7 bankruptcy last week after multiple creditors filed petitions in a Texas court, demanding the parent company CVG group pay its outstanding debts.
Three companies are reportedly pushing for the bankruptcy. The biggest creditor, Houston-based Parkview Capital Credit, claims EBONY’s owner, CVG owes $11.9 million. David M. Abner & Associates in California says CVG owes them $9,400 and New York-based Plum Studio claims to be owed $2,300.
An emergency hearing in which Ebony Capital will try to have Parkview’s Chapter 7 filing dismissed is set for August 6.
Parkview Capital Credit in 2016 financed the sale of EBONY and Jet when CVG purchased the storied Black publications from Johnson Publishing Company, then headed by Chairman Linda Johnson Rice. CVG formed the Ebony Media Group, as the corporation that aimed to rejuvenate EBONY and Jet. Four years later, both magazines remain in worse shape as problems continue to grow.
An attorney for Ebony Capital Partners said that the Chapter 7 filing is blocking plans to seek new funding for the media company. There are also plans to secure a new lender, but the bankruptcy petition must be dismissed before that can happen.
Meanwhile, its uncertain whether EBONY’s print edition will be revived. The publication was suspended in May 2019, one month before several editorial staff members left their jobs after being informed that their paychecks would be delayed because of financial problems.
Now, Parkview Capital Credit is demanding that EBONY and Jet be liquidated as the only way to save the brands. Parkview said the brands could be saved by developing the publications’ digital platforms.
The legal filing sets up a courtroom battle between Parkview Chairman Jacob Walthour Jr. against Ebony Media’s former CEO Willard Jackson Jr. In June, the Ebony Media Holding’s Board of Directors removed Jackson after an ongoing investigation revealed several unspecified financial transactions he made without the firm’s creditors approval.
Jackson responded with claims that the board meeting that led to his removal was illegal. He then said Walthour was removed as chairman of Ebony Capital Partners after the EBONY’s owners “grew concerned when Walthour began to book media appearances and shared confidential information with outlets, including The Wall Street Journal.”
Jackson said Walthour’s dismissal took place prior to him being removed as CEO of Ebony Media Group.
However, the Board of Directors denies those claims and says Walthour remains on the board.
EBONY magazine at one point had a print circulation as high as 2.3 million. It was sold in 2016 by Johnson Publishing Company, which filed bankruptcy in April 2019 after years of decline under Rice. She served as chair emeritus with Ebony Media, but eventually left saying the company failed to meet the standards set by her father, John H. Johnson, who founded the company in 1945.
Johnson created EBONY while working in the Supreme Life Insurance building at 35th and King Drive in Bronzeville. The magazine would eventually become the flagship publication of Johnson Publishing Company. Johnson became one of America’s richest Black businessmen and made the Forbes 500 list of wealthiest Americans.
Rice took over the company when her father died in 2005. In 2010, she sold the building that served as the headquarters of the Johnson Publishing Company at 820 S. Michigan Avenue. In 2019, the building opened as modern apartments, a year after it was designated a Chicago landmark.
Capping years of decline, Johnson Publishing sold its vast photo archives for $30 million to a group of philanthropic foundations.
In April, Johnson Publishing reached a $500,000 settlement in a defamation lawsuit filed by the family of two Georgia high school students. The family alleged the magazine, in a series of articles in 2014, falsely implicated the students in the mysterious death of a Black classmate in 2013.
This article originally published in the August 24, 2020 print edition of The Louisiana Weekly newspaper.
