Zwirn, Tama Battle In Court
April 24, 2008 at 5:23 AM (PT)
Investment firm D.B. ZWIRN AND CO. and TAMA BROADCASTING are trading lawsuits in federal court, as a lawsuit filed by ZWIRN against TAMA moved from a state court to U.S. District Court in NEW YORK, while TAMA has filed suit against ZWIRN in U.S. District Court for Middle FLORIDA in JACKSONVILLE.
ZWIRN's suit, which landed before Judge SHIRA SCHEINDLIN in NEW YORK on MARCH 27th after TAMA successfully got the court to change the suit's venue, claims TAMA defaulted on $29 million in loans and has not kept up nine stations in FLORIDA and GEORGIA. TAMA is attempting to block ZWIRN from putting TAMA's stations into receivership after TAMA's default on loans from ZWIRN; it filed a proposed class action against ZWIRN on MARCH 3rd in JACKSONVILLE, contending that ZWIRN is forcing stations into foreclosure in order to get the station assets cheaply and resell them. It also received a stay from the same court to block an auction of the station assets that ZWIRN had originally scheduled for FEBRUARY 14th.
TAMA says that ZWIRN is trying to get around the need for FCC approval for the sale of the stations by foreclosing upon the stations' physical assets and not the licenses, and improperly set up the auction with no promotion so that ZWIRN would be the only bidder to show up. In paperwork filed with the NEW YORK court, TAMA also alleged that ZWIRN may have violated FCC rules by taking "complete control" of the stations.
ZWIRN is being investigated by the SEC over freezing withdrawals on over $4 billion in assets and several accounting issues, but is reportedly planning to launch a new hedge fund.