Nine years ago, it was the No. 1 operator of radio stations in Kansas. A bitter family feud then ensued, pitting Monte and Doris Miller against son Christopher Miller, who rapidly expanded Rocking M Media — something his parents blame for a March 2022 bankruptcy filing.
In that bankruptcy filing, creditors were poised to recover monies owed through the sale of stations to a proposed buyer who never completed the deal. Legal action was taken, with L.A.-based legal giant Manatt Phelps & Phillips hired to represent the creditors. They’ve just won their case, putting an end to 2 1/2 years of wrangling.
Specifically, it is Manatt Bankruptcy Partner Schuyler Carroll and his New York-based team that sealed the funds for the unsecured creditors and its successor, the “Liquidating Trustee.”
Among the largest unsecured creditors were music rights organization ASCAP, with some $12,206 owed; $547 to SESAC; and $5,557 due to fellow music rights group Broadcast Music, Inc. (BMI).
Personal guarantees were provided by the Millers to the creditors. This ties back to a pre-2022 bankruptcy agreement that saw the proposed divestment of some Rocking M stations in Wichita to Allied Media Partners. That agreement fell apart, and in a highly public manner. On Sept. 24, 2019, four FMs, an AM with an FM translator, and an AM talker serving the Wichita market fell silent. AMP, which had agreed to purchase the stations and was operating them under a pre-closing lease agreement, was locked out of the studios by the landlord, who blamed Rocking M for failing to pay the rent. However, Monte Miller blamed the buyer, citing concerns for its finances. AMP fired back through its CEO, placing the blame on Miller and its own fiscal troubles it had not dealt with.
By October 2019, AMP formerly shuttered operations in Wichita. Then came litigation, as AMP claimed it was not require to close the transaction because Rocking M had not provided documents that were required prior to scheduling a closing date. With the March 2022 bankruptcy petition, a case involving the creditors was ready for trial. However, litigation was stayed by this filing, allowing Rocking M to sell all of its radio stations before settling the unsecured claims.
Fast-forward to October 2022, with the stations originally sold to AMP now getting new buyers in a court-administered auction that saw noted broker Greg Guy handle the sales.
My Town Media, led by Bill Wachter, was the top bidder for KIBB-FM in Haven, Ks.; KVWF-FM in Augusta, Ks.; KLEY-AM & KWME-FM in Wellington, Ks.; and KKLE-AM and translator K230CE in Winfield, Ks. — Wichita properties originally intended for sale to AMP. An additional station, KKGQ-FM in Newton, Ks., is now owned by Pinnacle Media; it purchased the station in February 2022.
With Wachter finalized as the owner of the stations in May 2023, it was understood by the creditors represented by Manatt that they would be the beneficiaries of any recovery. However, Manatt’s legal team asserted that after the radio stations were sold, Rocking M Media “was ready to throw in the towel, which would have resulted in further loss to the creditors.”
Enter Carroll, who with summer associate Maddie Horner and litigation specialist Sara Restrepo “quickly became familiar with the years of litigation and set about readying for trial,” Manatt said.
After a two-day bench trial, United States Bankruptcy Judge Dale Somers issued a 30-page decision, awarding judgment in favor of the Liquidating Trustee. But, it is not the Millers who will be directly responsible for the funds, per se, that need to go to the unsecured creditors.
Contrary to Allied Media’s assertions, Somers found that AMP did not comply with the terms of the purchase agreement. Therefore, Rocking M Media did not breach the purchase agreement. This means, the judge ruled, the failure to close the original deal constituted a breach by Allied Media.
This order was designed as an opinion by Judge Somers on November 12. Rocking M immediately filed an objection, with a status hearing now scheduled for December 12 in the federal bankruptcy court overseeing the 2 1/2-year long matter. This could put AMP in a position to fund Rocking M with the dollars needed to go to the unsecured creditors.
In the meantime, some money will be heading to the unsecured creditors. On November 22, Somers issued a judgment sustaining their claim to an earnest money deposit, putting the wheels in motion on giving them at least some of the funds they’ve been seeking.
Still, AMP is doing what it can to appeal the decision, as Loeb & Loeb attorneys representing the unsecured creditors committee are also involved in the still-ongoing litigation.
