"The Source" Bankruptcy Petition Prevents Auction
Plans to auction off shares of The Source Magazine by Textron Financial came to a halt yesterday (July 27) after three creditors filed an involuntary Chapter 7 bankruptcy petition against The Source Enterprises.
According to The New York Post, entertainment lawyer L.Londell McMillan, who was previously hired by former Source owners David Mays and Raymond "Benzino" Scott during their power struggle with the magazine's financial investors, has teamed with two other creditors, Brooklyn resident David Villorente and Encino, CA firm PC Mall Inc, and filed a bankruptcy petition.
McMillan, who has also represented Prince, Michael Jackson and Lil Kim, claims that Mays and Benzino never paid him for his services and is now seeking for the new owners to pay the $530,228 he says he's owed.
Villorente says he's owed $4,700 by the magazine, while PC Mall claims they are owed $28,000 for computer supplies.
For the past several months, Rhode Island-based investor Textron Financial, who owns 82% of The Source's shares, has been attempting to auction off their stake in the magazine. The firm loaned $18 million to the Source in 2002. As recently as yesterday, SOHH had received word that the magazine would be auctioned, but with the latest developments in bankruptcy court, The Source Enterprises Inc. could possibly be facing a liquidation sale.
Black Enterprise/Greenwich Street Partners also loaned the magazine money in 2002, and after installing a new board of directors who removed Mays and Scott from power had been attempting to revive The Source. The bankruptcy petition filed by McMillan, VIllorente and PC Mall was not well received by Black Enterprise CEO Earl "Butch" Graves, Jr.
"Everyone who is a creditor will now have to come to the court and negotiate," Graves told the New York Post before calling McMillan "a disgruntled, unsecured creditor who was trying to have us negotiate with him outside of all the other creditors."
According to The New York Post, entertainment lawyer L.Londell McMillan, who was previously hired by former Source owners David Mays and Raymond "Benzino" Scott during their power struggle with the magazine's financial investors, has teamed with two other creditors, Brooklyn resident David Villorente and Encino, CA firm PC Mall Inc, and filed a bankruptcy petition.
McMillan, who has also represented Prince, Michael Jackson and Lil Kim, claims that Mays and Benzino never paid him for his services and is now seeking for the new owners to pay the $530,228 he says he's owed.
Villorente says he's owed $4,700 by the magazine, while PC Mall claims they are owed $28,000 for computer supplies.
For the past several months, Rhode Island-based investor Textron Financial, who owns 82% of The Source's shares, has been attempting to auction off their stake in the magazine. The firm loaned $18 million to the Source in 2002. As recently as yesterday, SOHH had received word that the magazine would be auctioned, but with the latest developments in bankruptcy court, The Source Enterprises Inc. could possibly be facing a liquidation sale.
Black Enterprise/Greenwich Street Partners also loaned the magazine money in 2002, and after installing a new board of directors who removed Mays and Scott from power had been attempting to revive The Source. The bankruptcy petition filed by McMillan, VIllorente and PC Mall was not well received by Black Enterprise CEO Earl "Butch" Graves, Jr.
"Everyone who is a creditor will now have to come to the court and negotiate," Graves told the New York Post before calling McMillan "a disgruntled, unsecured creditor who was trying to have us negotiate with him outside of all the other creditors."
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