The AJC reports that Creative Loafing has filed for bankruptcy.   “CEO Ben Eason said the filing would help the chain improve its online business while it reorganizes its operations,” writes the AJC.

Fresh Loaf has been linking to other blogs that predict trouble for other prominent free weeklies, including layoffs at the Village Voice.  But staff in Atlanta has no worries, or so says the CEO:

“The bankruptcy petition was filed in Tampa, where the company’s based, and was timed to preclude an interest payment that was owed lenders on Wednesday.

The company will ask federal bankruptcy Judge Caryl Delano to stay any attempt by creditors to liquidate the assets or take control of the company.

“We’re doing the right things,” Eason said. “This will give us a fresh start. It is a reorganization, not a liquidation. Everybody gets paid.”

The debt load was substantially increased last year when Creative Loafing purchased the Chicago Reader and the Washington City Paper. Since then, advertising revenues for the print editions of the papers has deteriorated, as they have for newspapers nationwide. Over the same period last year, revenues were down between 10 and 15 percent.

The Loaf’s creditors include the Georgia Department of Revenue and the company that prints its papers.