Power couple George Lucas and Mellody Hobson are trying to take possession of Ebony magazine’s historic photo archives, which were used as collateral for a $12 million loan they made to now-bankrupt Johnson Publishing four years ago.
Capital Holdings V, a company controlled by the filmmaker and his financier wife, filed a motion Wednesday in Chicago federal Bankruptcy Court seeking to foreclose on the archives, citing the risk to their loan repayment and the iconic photo collection itself.
On Thursday, Lucas and Hobson issued a statement through their company expressing the need to preserve the Ebony archives.
“The Johnson Publishing archives are an essential part of American history and have been critical in telling the extraordinary stories of African American culture for decades,” the company said. “We want to be sure the archives are protected for generations to come.”
The Ebony photo collection, which contains 5 million images and was appraised at $40 million in 2014, may be the most valuable asset left in the once influential Chicago-based publishing empire, which sold its magazine holdings three years ago and on April 9 filed for Chapter 7 bankruptcy liquidation.
Johnson Publishing has been trying unsuccessfully to sell its photo archives for more than four years.
Founded in 1942, Johnson Publishing launched Ebony three years later. The lifestyle magazine documented and influenced the African-American experience for more than 70 years, coming into its own as it reported from the front lines of the civil rights movement during the 1960s in powerful photos and prose.
The historic photo collection spans all aspects of African-American history, chronicling everyone from Martin Luther King Jr. to Sammy Davis Jr., and includes a 1969 Pulitzer Prize-winning photo of King’s widow and child, taken at his funeral.
Other photos include Emmett Till’s 1955 funeral in Chicago, and a treasure trove of original work from Johnson Publishing photographers of such historic African-American figures as baseball great Hank Aaron, boxing champion Muhammad Ali, civil rights leader Malcolm X and former South African president and anti-apartheid leader Nelson Mandela.
In January 2015, facing economic headwinds in the digital era, then-CEO Desiree Rogers and Linda Johnson Rice, daughter of Johnson Publishing founder John Johnson, put the entire photo collection up for sale, hoping to raise much-needed capital.
Less than four months later, court documents show Johnson Publishing secured the $12 million loan from Capital Holdings V, a San Francisco company controlled by Lucas and Hobson, who is president of Chicago-based Ariel Investments.
Hobson declined to comment beyond the Capital Holdings V statement Thursday, while an attorney representing Johnson Publishing did not respond to a request for comment.
In 2016, Johnson Publishing exited the magazine business, selling Ebony and its sister publication, Jet, to an Austin, Texas-based private equity firm for an undisclosed amount.
Johnson Publishing, which retained its Fashion Fair Cosmetics business and its historic Ebony photo archives, in its bankruptcy filing cited failure of the media purchaser to make required payments, increasing digital cosmetics competition and “many unsuccessful attempts” to restructure or sell the company.
The Capital Holdings V loan has been in default for about three years, with Johnson Publishing owing $13.6 million including principal and unpaid interest, according to Wednesday’s filing.
A hearing on the motion is set for Tuesday.
(SOURCE: TNS)
(Article written by Robert Channick)
