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Is The Source Looking For A New Home?
The Source Magazine, the self-proclaimed "Hip-Hop bible," has lost more than $11 million over the past four years, and has failed to file any state and/or federal income tax over the course of the last two years.
In addition, the magazine, founded by David Mays and his longtime business partner Raymond "Benzino" Scott, has also failed to deliver issue subscription mailers the publication, and a lawsuit regarding that is still pending. The case states that nearly $3 million in bad checks, over the past nine months, have not been paid for.
The lawsuit, filed by one-time lender Textron Financial Corp., which loaned the company $18 million, says that The Source has defaulted. Both parties are due back in a New York State Supreme Court room on Wednesday, November 2nd.
"Borrower's records of checks, and wire, have little or no back-up, and [the] borrower appears to have no internal controls," claims the lawsuit filed by Textron's attorney Thomas Finn. "Senior management seriously mismanages borrower's cash."
In the first half of 2005, auditors discovered nearly $1 million in unauthorized expenditures. This figure comprised of $422,000 in payments to company insiders, $357,000 to travel agents, and $80,000 for "promotional" jewelry. The suit further estimates 2005 sales at $20.7 million, a $5.1 million decrease from the year before. The suit also alleges that the company's net loss widened from $831,000 in 2004, to $2.26 million in 2005.
According to Media Ink, the magazine also owes $156,000 in back rent and have been asked to vacate the premises, at 28 W. 23rd St., by Monday.
Mays says that isn't so. He told Media Ink that Forbes Inc. is the leaseholder, and that they have assisted in "bailing" The Source out of that situation. Forbes' officials tell a different story. "They did sub-lease the space from Forbes.com, and we've been in and out of court for the past few months trying to resolve it," said a spokeswoman.
In addition, the magazine has seen its circulation numbers plunge drastically. Previously, The Source was selling 500,000 copies per month, in 2002 and 2003, and, it's reported, that they are now selling about 250,000 copies a month.
Mays insisted that everything was under control. "The company is going through a restructuring, which many companies are doing today due to the economy." He went on to say that The Source has been "hurt because of what is going on in the hip-hop world."
In related news, The Source is taking the offensive in a lawsuit that has been filed against Black Entertainment Television [BET] over the canceled "Source Awards." The show, which was held in Miami in 2003 and 2004, was cancelled over Columbus Day weekend and there has been no makeup air date scheduled at press time.
Source: sohh.com
In addition, the magazine, founded by David Mays and his longtime business partner Raymond "Benzino" Scott, has also failed to deliver issue subscription mailers the publication, and a lawsuit regarding that is still pending. The case states that nearly $3 million in bad checks, over the past nine months, have not been paid for.
The lawsuit, filed by one-time lender Textron Financial Corp., which loaned the company $18 million, says that The Source has defaulted. Both parties are due back in a New York State Supreme Court room on Wednesday, November 2nd.
"Borrower's records of checks, and wire, have little or no back-up, and [the] borrower appears to have no internal controls," claims the lawsuit filed by Textron's attorney Thomas Finn. "Senior management seriously mismanages borrower's cash."
In the first half of 2005, auditors discovered nearly $1 million in unauthorized expenditures. This figure comprised of $422,000 in payments to company insiders, $357,000 to travel agents, and $80,000 for "promotional" jewelry. The suit further estimates 2005 sales at $20.7 million, a $5.1 million decrease from the year before. The suit also alleges that the company's net loss widened from $831,000 in 2004, to $2.26 million in 2005.
According to Media Ink, the magazine also owes $156,000 in back rent and have been asked to vacate the premises, at 28 W. 23rd St., by Monday.
Mays says that isn't so. He told Media Ink that Forbes Inc. is the leaseholder, and that they have assisted in "bailing" The Source out of that situation. Forbes' officials tell a different story. "They did sub-lease the space from Forbes.com, and we've been in and out of court for the past few months trying to resolve it," said a spokeswoman.
In addition, the magazine has seen its circulation numbers plunge drastically. Previously, The Source was selling 500,000 copies per month, in 2002 and 2003, and, it's reported, that they are now selling about 250,000 copies a month.
Mays insisted that everything was under control. "The company is going through a restructuring, which many companies are doing today due to the economy." He went on to say that The Source has been "hurt because of what is going on in the hip-hop world."
In related news, The Source is taking the offensive in a lawsuit that has been filed against Black Entertainment Television [BET] over the canceled "Source Awards." The show, which was held in Miami in 2003 and 2004, was cancelled over Columbus Day weekend and there has been no makeup air date scheduled at press time.
Source: sohh.com
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