The Ontario-based owner of the popular health and fitness titles MuscleMag and Oxygen has sold them to a California-based publisher, relinquishing two marquee magazines from the now beleaguered publishing empire just three months after it filed for bankruptcy.
Canusa Products Inc., the parent of Robert Kennedy Publishing Inc., sold off its magazine business to Cruz Bay Publishing Inc. according to Deloitte and Touche, who was appointed as trustee of the bankrupt estate.
?Cruz Bay Publishing Inc. will effectively re-start the publishing and distribution business, involving Oxygen, MuscleMag International, Clean Eating, Reps, American Curves, and the former magazine Maximum Fitness,? Deloitte told the Financial Post.
An agreement for the sale transaction, for which the financial details were not disclosed, was entered into on Aug. 16 and approved by the Ontario Superior Court on Aug. 23, according to documents.
The sale comes 16 months after the death of the publishing house?s visionary and namesake Robert ?Bob? Kennedy, who started MuscleMag at a Brampton, Ont. kitchen table in 1974 and later counted bodybuilding legend and former California governor Arnold Schwarzenegger among his friends.
That one magazine eventually grew into a health and fitness empire with a roster of hundreds of books and magazine, including Mr. Kennedy?s New York Times best-seller Hardcore Bodybuilding.
Many traditional media companies have faced challenges in the internet era, as print advertising withers and online advertising struggles to compensate.
But the April 2012 death of Mr. Kennedy, who was also the company publisher, had a major impact on the firm, according to the Deloitte trustee?s preliminary report. His death was a blow morale-wise and on the day-to-day business, former employees said.
Mr. Kennedy?s wife Tosca Reno, a fitness model and prolific health book author, ?reluctantly took the helm of the distressed publishing business?, she said in a June blog post.
Ms. Reno, who also wrote several best-selling health books including the Eat Clean Diet series, could not be reached for further comment.
Canusa filed for bankruptcy on June 7, laying off roughly 60 employees. At its peak, about 120 people worked at Robert Kennedy Publishing.
Other contributors to Canusa?s financial woes included the cost of a settlement with a ?significant advertiser?, ?unfavourable industry trends? for magazines, and costs relating to a MuscleMag retail venture Mr. Kennedy had launched and later sold, the trustee?s report added.
?Due to many years of financial difficulty, I was forced to make the decision to restructure the business as a whole in order to allow our brands? to possibly find a new home, where my hope is they can thrive again,? Ms. Reno wrote in June.
The Canadian trademarks for Oxygen and MuscleMag International were not held by Canusa Products Inc. and were not part of the bankruptcy, but instead were held in the testamentary estate of Robert Kennedy. Similarly, Clean Eating and other U.S. and Canadian trademarks were officially held by the estate of Tosca Reno Media Inc., not Canusa.
However, both estates ?sold certain trademarks to complete the en bloc sale,? Deloitte said.
Cruz Bay Publishing is a subsidiary of Active Interest Media (AIM), a media company based in El Segundo, Calif.
Cruz Bay was not immediately available for comment.
The company produces several consumer magazines, including Yoga Journal, Better Nutrition, American Cowboy, and Horse & Rider, reaching 36 million readers in 85 countries around the world, according to its website.
AIM has been busy with acquisitions this year, snapping up Skiing magazine and other properties of the Colorado-based Bonnier Mountain Group in May.
?Active Interest Media is actively seeking further acquisitions of leading consumer media properties in niche enthusiast markets,? it said on its website.