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*The Source magazine and Source Entertainment Inc. filed for Chapter 11 bankruptcy in Manhattan Friday after shady business practices from the magazine’s former management caused advertisers to pull out, according to court papers.
With Friday’s filing, the publication also converted and consolidated a previous Chapter 7 filing and listed assets of about $1.3 million and liabilities of $35 million, reports the Associated Press.
The Chapter 11 filing is the latest in the financial soap opera starring the one-time hip hop bible. Source Entertainment Inc. fired founders David Mays and Raymond "Benzino" Scott from the company in early 2006 due to sluggish advertising and newsstand sales, not to mention their high-profile beefs with such rappers as 50 Cent and Eminem.
The magazine had also stopped sending issues to over 140,000 subscribers. Kable News Co., the company that handles subscriptions for The Source, has entered a pre-bankruptcy claim of about $117,500 for lost subscriptions. Since 2002, subscriptions for The Source have dropped by more than 50 percent.
Meanwhile, an attorney for the magazine said the company is planning a comeback from bankruptcy as a "reorganized" entity.
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