Air America sale OK'd by court
EmptyNEW YORK -- A federal bankruptcy judge on Friday approved the sale of the liberal talk radio network Air America Radio for $4.25 million to Stephen L. Green, founder of a New York real estate firm.
Green and his brother Mark Green -- the longtime liberal New York City politician and frequent guest on Air America -- plan to continue running the network.
In announcing his plans to buy the network in late January, Green said in a statement that he intended to make it "a successful business that returns a profit," stabilizing its finances, building up its programming lineup and forming partnerships with other distribution platforms beyond radio. Green doesn't own any other media outlets.
The approval of U.S. Bankruptcy Judge Robert Drain allows the transfer of all the assets of Piquant LLC, parent company of New York-based Air America, to a group including new and current investors. Assets would be transferred once the sale closes.
The deal gives a majority stake to Green Family Media LLC, an entity controlled by Green, and a minority stake to Democracy Allies LLC. That group includes RealNetworks Inc. Chief Executive Robert Glaser and two former Air America board members.
Air America was launched in 2004 and has lost money ever since. Its most prominent personality was the comedian and author Al Franken, who left the network on Wednesday to run for nomination to a U.S. Senate seat from Minnesota.
Green is the founder and chairman of SL Green Realty Corp., a publicly traded real estate investment trust that owns 34 Manhattan office buildings and has a total of 27 million square feet of space under its control. His brother Mark, a liberal Democrat, once served as New York City public advocate and has unsuccessfully run for U.S. Senate, New York City mayor and most recently, state attorney general.
Lawyers for Green asserted that he offered "the only chance for the debtor to avoid liquidation." Air America Chief Executive Scott Elberg said Friday that if the sale was not approved, the network would soon be closed down.
The network produces 19 hours of original programming a day and is heard on 81 affiliates that reach 1.9 million listeners per week.
The deal is expected to close next week, Air America lawyer Tracy Klestadt said in court.
A committee of creditors had objected to the deal, arguing that it benefited insiders such as Glaser and that creditors had been victims of a "bait and switch."
Creditors said that they had originally been promised a distribution of 8.5 cents on the dollar under a deal that fell through, compared to the 1 cent per dollar under this deal. That bid had been submitted by individuals who were not previously affiliated with Air America.
Democracy Allies was formed to lend money to the debtor when it entered bankruptcy in October. In addition to Glaser, the group includes former board members Terry Kelly and Douglas Kreeger. The SL Green sale gives it a minority stake and full payment of a $3.25 million loan.
The proposed sale was initially announced Jan. 29, after about 15 potential bidders had originally inquired but none offered a higher bid.
The deal will allow Piquant to pay back its loan to Democracy Allies, pay $526,000 to resolve back rent and building costs at its headquarters and pay $500,000 for creditor claims.
Lawyers said in court that contracts with the radio network's talent were being renegotiated. Klestadt declined to comment on Friday about what would happen to existing claims.
Air America has struggled financially since its inception. At the time of its Oct. 13, 2006, bankruptcy filing, court documents showed the company lost $9.1 million in 2004, $19.6 million in 2005 and $13.1 million by that date in 2006.
Glaser was owed about $9.8 million at the time of the filing.