• Editor & Publisher, Tuesday, August 25, 2009 10:08 PM

A New York hedge fund snapped up the Creative Loafing newspaper chain for $5 million during a bankruptcy auction yesterday. The new owner promises to keep its six free alternative weeklies running as normal.

Atalaya Capital Management made the winning bid for the alternative weeklies in Atlanta, Chicago, Washington, D.C., Charlotte, N.C., and Sarasota and Tampa, Fla. Bidding began at $2.32 million by the chain's longtime owners, the Eason family.

Creative Loafing borrowed roughly $40 million in 2007 to buy Washington City Paper and the Chicago Reader. The company filed for Chapter 11 bankruptcy protection in Tampa in September. Creative Loafing's new board of directors is expected to include journalists such as ex-Los Angeles Times editor Jim O'Shea.

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