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Debt Ensnares Parent Companies of Local Publications

The fate of three Orange County publications could be up in the air as their parent companies struggle with debt.

Los Angeles-based Modern Luxury Media LLC, parent of Costa Mesa-based Riviera magazine, faces an uncertain future as it wrestles with $120 million in expansion-incurred debt.

Michael Kong, Modern Luxury’s founder, has been pushed out, according to sources. William Cobert, chief executive of Los Angeles-based investment holding company Ebitda Media LLC, has taken Kong’s place.

Kong looks to be a victim of aggressive expansion, the cost of which couldn’t be sustained in the downturn.

He and his brother founded Modern Luxury in 1993 with a single magazine, Chicago Social. By 2004, they had nearly two dozen city magazines targeting upscale readers and advertisers.

Early on, Modern Luxury teamed with the late Roy Disney’s Burbank-based Shamrock Capital Advisors.

Shamrock sold its majority stake in 2007 to investors led by Beverly Hills-based Clarity Partners LP, with debt financing from Credit Suisse Group AG and NewStar Financial Inc.

The lenders now are said to be in control.

No word on what the shift means for Riviera, which competes with Indianapolis-based Emmis Communications Corp.’s Orange Coast magazine and Irvine-based Freedom Communication Inc.’s Coast, both of which have seen their share of troubles.

Freedom is emerging from bankruptcy after filing last year. Newport Beach’s Orange Coast has had to let go a number of key executives in the down market.

The parent of 944 magazine, which targets a younger, party crowd, also is struggling after creditors and lawsuits forced it to file for Chapter 11 bankruptcy protection.

Beverly Hills-based 944 Media LLC hopes to regroup and keep going.

“The whole point of this proceeding is to enable us to keep doing what we do while resolving the litigation in an orderly process,” said Marc Lotenberg, founder and chief executive.

944 Media has about $10 million in assets and $10 million to $50 million in liabilities. It owes about $2.5 million to Las Vegas-based Creel Printing & Publishing Co., one of its largest creditors.

The parent of weekly alternative newspaper OC Weekly in Santa Ana also faces the prospect of bankruptcy after recently defaulting on its debt.

Arizona’s Village Voice Media Holdings LLC, which owns OC Weekly, LA Weekly and New York’s Village Voice, among others, owes $77 million to a group of lenders led by Bank of Montreal.

And Village Voice has a $21 million, 2008 jury verdict hanging over its head as a result of a lawsuit brought by the San Francisco Bay Guardian against Village Voice’s SF Weekly. The verdict is on appeal.

Hyundai: IPad

Fountain Valley-based Hyundai Motor America is looking to appeal to consumers used to the finer things.

The automaker, part of South Korea’s Hyundai Kia Automotive Group, is going after buyers with its luxury Equus sedan.

Potential buyers also get five-star treatment, with dealers bringing Equus demo cars to their doorstep for a personal presentation of the features.

And, for those who buy, there’s another perk: an iPad.

With an Equus purchase, Hyundai’s throwing in an Apple Inc. iPad loaded with a digital version of the owner’s manual. The device also has a preloaded Hyundai app to track service appointments.

The Equus is expected this summer at around $55,000, a lot more than Hyundai’s more affordable Sonata sedan at around $20,000.

Hyundai is trying to position itself as a modern, technologically savvy brand against luxury rivals such as Mercedes-Benz, BMW, Lexus and Acura. It made a similar push with last year’s Genesis sedan and Genesis coupe.

McClatchy Expansion

Irvine-based WebVisible Inc., an online advertising search company for small businesses, has expanded a deal with Sacramento-based newspaper company McClatchy Co. to include all of its daily newspapers by year’s end.

McClatchy, which owns the Sacramento Bee, Miami Herald and others, has tested WebVisible’s service in Fresno, Kansas City and Tacoma, Wash.

The goal is to add markets every month starting with Boise, Idaho, Miami and Sacramento.

By December, the effort should cover all of McClatchy’s 30 daily newspapers in 29 markets.

WebVisible’s software helps small businesses buy and target online advertisements.

Its software, called Geneva, automates the process of buying online advertising.

The move with McClatchy comes on news that small-business search spending surged in the fourth quarter with a typical small-business advertiser spending $2,149 on search advertising, more than double from a year earlier.

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