Frontiers Media, LLC, publisher of Frontiers magazine, sought Chapter 11 restructuring on March 6 to gain breathing room to set its financial house in order. The firm made a voluntary petition for Chapter 11 reorganization in the United States Bankruptcy Court for the Central District of California in order to restructure debts and emerge with a stronger balance sheet.

Frontiers expects to continue its daily operations and regular publishing schedule as “debtor-in-possession” for the duration of its bankruptcy case.

In a statement, Frontiers publisher David Stern said, “Mark Hundahl and I, as the publishers of IN Publications Inc., purchased Frontiers in 2007 when the landscape of media looked quite different. With the passing of Mark in December 2012, I felt this was the right time to restructure the debt of Frontiers Media so we could remain a strong and viable resource for the LGBT community.”

David Stern with LA Gay

The nearly 31-year-old publication has been struggling lately to deal with the effects of the Internet on its core business, their hard copy newsmagazine, which is distributed from San Diego to Ventura from a core here in West Hollywood.

Begun by a West Hollywood city founder, Bob Craig, in 1982, the publication has had difficulties since Mr. Craig’s death in 2000. In 2007, after the Craig family decided it would no longer publish the magazine, Mark Hundahl and David Stern, with whom Bob Craig partnered in 1997 to form IN Magazine as an alternative voice, purchased the publication and merged the two into Frontiers IN LA.

Recently, the publication has struggled with the advent of the Internet and movement away from hard copy of its fundamental advertising revenue steam, its gay-oriented classified section. While it had a web site beginning in September 1995, the firm began looking for ways to move its primary business to its newly designed web site in 2009. Frontiers bought 50 percent of WeHo News in 2010 to leverage West Hollywood’s high readership to enhance its web visibility. That partnership dissolved amicably after seven months due to differences in corporate cultures.

The changeover to the web-based model has been slow, said David Stern, especially as Mark Hundahl grew more ill with his cancer (he died in December 2012). Mr. Stern and Mr. Hundahl broached the idea of a restructuring in early 2012, but decided to hold off until they could present debtors with a viable plan.

Mark Hundahl, right and David Stern, left, with two unidentified peole at the 30th Anniversary Party.

That plan came to fruition, said Mr. Stern, now that web readership has nearly tripled to over 50,000 readers per month since 2010 and “with the last year’s successful events and introduction of our online core business model – LA City Scoop business directory.” The events that were added, the West Hollywood Auto Show, sponsorship of the WeHo Go-Go Dancer Appreciation Day, an annual birthday celebration and the Community Builders Awards, have buttressed the bottom line.

“Our new LA City Scoop gay-friendly business and services directory is what Frontiers was always for – giving gay people a way to locate gay-friendly places to do business. We have worked hard to bring it to the web, and have launched it very successfully. We now feel confident that it will bring a steady revenue stream,” said Mr. Stern.

He also added that the events calendar was again full this year, “with the 31st Anniversary Birthday Bash and Community Builders Awards, held Saturday, April 20, at The Abbey in West Hollywood from 4-7 p.m. This year we are honoring Los Angeles Councilman Bill Rosendahl, Jewel Thais of L.A.’s Catch One Nightclub, longtime activist and artist Ivy Bottini and OUT@NBCUniversal.”

The upshot of the move to restructure, said Mr. Stern, is that Chapter 11 will give the firm time to blossom. “Our circulation and advertising base remain strong, and we fully expect to emerge from the reorganization process on sound financial ground.”

Frontiers’ largest debtor among the institutions and people it owes $3.2 million is Wells Fargo Bank ($1.6 million), which Mr. Stern called “a dream to work with, an excellent partner and friend to the community and to our publication.” That loan is a Small Business Administration loan made in 2008, shortly after the pair bought the firm. The parameters of the restructuring were worked out in cooperation with that institution, he said.

A cover from an early Frontiers Magazine.

He deplored another local media outlet's salacious report that emphasized the debt and disagreements between Peter Anderson, the court-appointed bankruptcy trustee, and Frontiers’ team of attorneys. It noted that Mr. Anderson took issue with the bank’s allowance of a $150,000 director’s compensation, which Mr. Stern said was the total compensation that he and Mr. Hundahl split last year. He received a bit over $82,000.

In addition, wehoville made mention of a disagreement over a car allowance and expense account totaling $1,763, which Mr. Stern says Wells Fargo has agreed are his due. Furthermore, said Mr. Stern, the wehoville article failed to acknowledge that some of the debt they listed in the article is not actually debt, but simply business as usual, including rent for its headquarters on Wilshire Boulevard, printing costs, lawyers’ fees and payroll.

“We are current on all of our obligations to our employees and payroll is going out every Friday in the same schedule it always has,” said Mr. Stern, “something that wehoville left murky in their report. Yes, we’re a little behind in some payments and not in others, but that’s not unusual for any business, especially one seeking restructuring.”

Wehoville also implied that Aaron Drake, one of the publication’s co-editors, left because of the bankruptcy, saying that he “quit abruptly on March 5, the day before the bankruptcy filing.” Mr. Stern, while saying that he could not legally reveal the precise reasons for Mr. Drake’s departure, could say, “It had nothing at all to do with the Chapter 11 filing.”

Full disclosure: WeHo News founding editor began his professional writing career with Frontiers Magazine in 1999, rapidly helping it to go from, as one commentator said at the tme, "a book of pretty ads to a must read news organ." Mr. Gierach left the publication in 2002, but Frontiers bought 50 percent of Weho News in 2010. The firms spilt apart in 2011 it became clear that the two cultures would not successfuly mesh.