“Air America Radio today filed for bankruptcy, listing liabilities in excess of $20 million and assets of only $4 million. The Chapter 11 filing by Piquant LLC, the radio network’s parent company, was made in U.S. District Court in Manhattan,” The Smoking Gun reports.
“The company’s single largest creditor is Rob Glaser, founder of RealNetworks, who is owed $9.8 million, according to the bankruptcy petition,” The Smoking Gun reports. “The list of Air America’s creditors runs 25 pages, and includes on-air personalities like Al Franken ($360,749.98) and Chuck D ($10,749.99), as well as law firms, landlords, limousine firms, and a variety of other businesses.”
An excerpt of the court filing showing all Air America debtors here.
“The network will continue to operate with funding from its investor group, led by RealNetworks Inc. CEO Robert Glaser, who owns 36.7 percent of the company, and two other former board members,” Seth Sutel reports for The Associated press.
“Air America had dismissed rumors just one month ago that it was planning to file for bankruptcy protection. Spokeswoman Jaime Horn said Friday the filing became necessary only recently after negotiations with a creditor broke down,” Sutel reports. “Court documents showed that MultiCultural Radio Broadcasting Inc., a creditor with whom the network had tussled in its early days, had Air America’s bank accounts frozen.”
“Glaser had previously served as the company’s chairman… Horn said Glaser and Franken were unavailable for comment Friday… Air America has struggled financially since its inception. Court documents show the company lost $9.1 million in 2004, $19.6 million in 2005 and $13.1 million so far in 2006,” Sutel reports.
“Radio talk show host Rush Limbaugh, whom Franken lambasted in a book called ‘Rush Limbaugh is a Big Fat Idiot,’ took a jab at Air America’s worsening situation on his talk show Friday after a listener called in to ask about it. ‘I’m not surprised _ it was doomed to fail,’ Limbaugh said. ‘They were not a broadcasting concern to begin with. … They went into business to affect elections.'”
Full article here.
In related news, Krispy Kreme Doughnuts (Nasdaq: KKD) announced that this situation could potentially have a direct negative impact on the company’s revenue, but expressed confidence overall since Glaser did get a $761 million life preserver* from Microsoft last October.
*Yes, it cost $761 million. A life preserver sized to fit a small moon doesn’t come cheap.
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