Bruce Brugmann’s Bay Guardian has been granted court permission to intercept the income of the rival SF Weekly in an attempt to collect on a $21 million judgment. The move may force a creditor of the SF Weekly’s parent company to place the Arizona-based 16-paper chain in default. Brugmann (right) is exploring the possibility of placing the chain into involuntary bankruptcy.

The San Francisco Superior Case number is CGC-04-435584.

The following is from the Guardian’s report on the case:

In a court hearing on Monday, an attorney for the Village Voice chain, Randall Farrimond, pleaded for the court not to enter the order assigning part of the SF Weekly’s income to the Bay Guardian. “If this motion is granted, the bank will declare a default,” Farrimond told the court, and concluded, “If the Bay Guardian thinks there are more assets than those pledged to Bank of Montreal, they are mistaken.” …

Several court hearings scheduled for January have the potential to substantially advance the Bay Guardian’s collection efforts, which have gained momentum in recent weeks. In November, the Bay Guardian successfully auctioned off vehicles belonging to the SF Weekly.

The SF Weekly typically posts its version of developments in this court case but has not yet reported on Monday’s hearing.