Gay Media Investment Fund in Receivership
Avalon Equity, the investment fund which is the major shareholder in Window Media, which owns the Washington Blade, Southern Voice, Houston Voice, South Florida Blade, Genre Magazine, David Atlanta and The 411 Magazine, has been forced into receivership by the federal Small Business Administration (SBA), Gay City News reports:
"Avalon, which owns a stake in the company that publishes the New York Blade and HX, was licensed by the SBA as a small business investment company (SBIC) in 2000. Through 2007, it borrowed just over $38 million from the federal agency to invest in gay media properties and a range of other ventures. As part of its contract with the SBA, Avalon was required to have private money or assets in the fund from sources, such as individual investors, that had a value equal to half the amount it borrowed from the SBA or just over $19 million. In 2007, the SBA wrote Avalon that it had a 'condition of capital impairment' because the value of its private assets had fallen below the required level. In its 2008 lawsuit seeking to force the receivership, the SBA wrote that the 'capital impairment' was 61 percent in August of 2007 and that it rose to over 134 percent by December of that year...The percentages cited in the lawsuit suggest that Avalon had little or no capital left as private investors were pulling their money out, businesses owned by Avalon were losing money, assets in the fund lost value, or some combination of the three."
Gay Media in Receivership [gay city news]