Air America Files For Chapter 11 Bankruptcy, Will Stay On Air
October 13, 2006 at 12:50 PM (PT)
AIR AMERICA RADIO has filed for Chapter 11 bankruptcy. The network was forced to file when an unnamed creditor did not agree to proposed resolutions of outstanding debt and reportedly moved to seize the network's assets. PIQUANT LLC will continue to operate for now under a credit facility established by DEMOCRACY ALLIES LLC (a group with which AIR AMERICA board member and largest creditor ROB GLAZER is involved), with VP SCOTT ELBERG upped to CEO.
"Nobody likes filing for bankruptcy, however, this move will enable us to concentrate on informing and entertaining our audience during the coming months," said ELBERG in a press release. "Staying on the air is crucial for the Network's primary ratings period as well as for the country which is facing its most important mid-term election in recent history."
The network's filing indicates assets of $4,331,265.30 and debts of $20,266,056.23. REAL NETWORKS' ROB GLASER is the largest single creditor, with $9.82 million in secured debt and $475,000 in unsecured debt.
Among other notable creditors, AL FRANKEN is owed $360,749.98 in a priority claim, while his producer BILLY KIMBALL is owed $84,893.04 and PUBLIC ENEMY's CHUCK D., a weekend host and former weekday host at the network, is owed $10,749.99 (disputed). Former CEO DANNY GOLDBERG is owed $133,333.32 (disputed), while CLEAR CHANNEL VP GABE HOBBS' consulting firm is owed $7,500 and former President GARY KRANTZ is owed $245,641.06 (disputed).
Former programming VP JON SINTON is owed a disputed $4,174.48, former host MIKE MALLOY is owed $114,678.64, DEMOCRACY RADIO founder and AIR AMERICA SYNDICATION head TOM ATHANS is owed $11,951.96, RANDY MICHAELS' SOTR LLC/RADIOACTIVE is owed $37,500, and the network's new YOUNG TURKS morning show is owed $6,923.10.
Among unsecured claims, AFTRA's Health and Retirement Fund is owed $42,293.84 (disputed); ARBITRON is owed $161,345.26; CLEAR CHANNEL's KTLK-A/LOS ANGELES is owed $558,333.33 and CLEAR CHANNEL corporate is owed a disputed $3,389.77; former affiliate DIAMOND BROADCASTING/SACRAMENTO is owed $500,000 (disputed); ENVISION RADIO NETWORKS is owed $100,000; HARRIS CORP. is owed $14,994.01; ICBC (owner of former flagship WLIB-A/NEW YORK) is owed a disputed $293,385.51; JONES MEDIAAMERICA is owed $62,283.38; weekender MIKE PAPANTONIO is owed $100,000; MULTICULTURAL RADIO BROADCASTING is owed a disputed $500,000 stemming from the parties' earlier settled dispute over the short-lived lease agreement for affiliates in NEW YORK, LOS ANGELES and CHICAGO; and TALKERS MAGAZINE is owed $3,600.
The filing also indicates that the network has lost over $13 million this year and over $40 million since MAY 2004. A REUTERS report says that ELBERG's affidavit indicates that MULTICULTURAL blocked AIR AMERICA's ability to withdraw cash from its bank accounts, a situation which will be ended with the bankruptcy. ELBERG also said that the network's backers told it last month that they would no longer subsidize the losses.
See the filing at THE SMOKING GUN by clicking here.