An online media company that started in 2010 with major support from veteran newspaper publisher Carll Tucker and his wife, the well-known financial reporter Jane Bryant Quinn, recently filed documents seeking Chapter 11 bankruptcy. The company, Main Street Connect, is headquartered in Armonk, New York, and operates websites focusing on local news in approximately 40 cities throughout Connecticut and New York under the name “The Daily Voice.”
Documents from the company’s Chapter 11 bankruptcy filing reveal that Main Street Connect has twice as much debt as it does assets, with just over $850,000 in debts and only $400,000 in reported assets. The company was motivated to seek bankruptcy protection to shield itself from a lawsuit filed by former employees who are accusing Main Street Connect of violating the Fair Labor Standards Act by routinely requiring employees to work overtime without compensation. Before the bankruptcy filing, Main Street Connect had already taken aggressive steps to decrease its expenses including laying off half of its employees, closing and consolidating newsrooms, and completely ending all operations in Massachusetts.
Despite its challenges, Main Street Connect saw its revenues increase 50 percent in 2012 over the previous year. Carll Tucker indicated that the company was unable to sustain the legal fees required to defend itself in a potentially long trial in its weakened financial state, and so far, attempts to mediate a satisfactory resolution of the employee complaints have been unsuccessful.
Corporations often have to face unexpected setbacks that drain financial resources and pose a threat to their viability. Bankruptcy attorneys may outline options and alternatives that can give businesses breathing room to reorganize and weather difficult circumstances.
Alternate source: Street Fight, “Employees’ Overtime Suit Forces Daily Voice to Seek Bankruptcy Protection,” Tom Grubisich, May 8, 2013
Source: The Hour Online, “Main Street Connect files for bankruptcy“, May 14, 2013by