U.S. Attorney Files Objection To Inner City Bankruptcy Sale
February 16, 2012 at 3:51 AM (PT)
The U.S. Attorney for the Southern District of NEW YORK, PREET BHARARA, has filed an objection to the proposed sale of substantially all of the assets of INNER CITY BROADCASTING CO. in bankruptcy court, charging that the sale is being pursued to avoid taxes without cash flowing to the estate.
BHARARA's filing on WEDNESDAY (2/16) alleges that the Chapter 11 petition of INNER CITY "does not appear to have been maintained in good faith. Debtors have no intention of even attempting to reorganize under chapter 11. Nor do they intend to even seek to file a liquidating plan under chapter 11. Rather, the only purpose of this chapter 11 proceeding appears to be to allow the Senior Lenders to foreclose upon their collateral -- an action which they could have pursued outside of bankruptcy -- while obtaining the benefits of the 'free and clear' provisions that are unique to chapter 363 sales."