NY hedge fund buys Chicago Reader parent in bankruptcy auction

TAMPA, Fla. -- A New York hedge fund has snapped up the Creative Loafing newspaper chain during a bankruptcy auction.

Atalaya Capital Management promises to keep the free, weekly tabloids running as usual in Tampa, Atlanta, Charlotte, Sarasota, Washington, D.C., and Chicago.

On Tuesday, it bid $5 million for the newspapers. Judge Caryl Delano said the $5 million would satisfy the company's debts.

Creative Loafing's longtime owners -- the Eason family -- opened the bidding by offering $2.32 million. Ben Eason was effectively removed as chief executive of the chain Tuesday He says he will start a new online publication in Tampa later this week.