Armonk-based Main Street Connect L.L.C., online publisher of The Daily Voice in Westchester County and Fairfield County, Conn., filed for Chapter 11 bankruptcy protection last week.
The 3-year-old company, which seeks protection from creditors while it reorganizes, listed liabilities of approximately $867,000 and assets of approximately $394,600 in its U.S. Bankruptcy Court filing. A total of $18 million has been invested in the company, according to court documents.
In an affidavit, Carll Tucker, chairman and founder of Main Street Connect, said a lawsuit filed by two former reporters, claiming the company violated the Fair Labor Standards Act, has hampered the company’s ability to add investors. The reporters claim they were unfairly exempted from earning overtime.
Tucker in his filing said potential investors don’t want to invest money until the lawsuit has been resolved and the company does not have the financial wherewithal to continue a legal fight. Main Street Connect has already spent more than $500,000 fighting the lawsuit.
In March, Main Street Connect laid off 45 employees and closed its Massachusetts branches. The layoffs reportedly came after Tucker sent a memo telling employees he had good news.
Tucker himself is one of the creditors listed in the filing, claiming he is owed $250,000.
Main Street Connect currently has 44 employees. The company will continue to operate and expects to emerge from bankruptcy within 60 days.
Main Street Connect operates 30 Daily Voice websites in Westchester and 11 websites in Connecticut.