FCC approval of receivership station transfer upheld in DC Circuit


Glenn Cherry lost his radio group when it went into default and a New York court approved the appointment of a receiver. He claimed he was damaged by the FCC when it approved involuntary transfers of control to that receiver. However, the DC Circuit Court tossed the case, saying that Cherry lacks standing to press his charge.

Cherry had borrowed $21M from D.B. Zwirn. In the course of litigation “problems and disagreements, which resulted in litigation,” Zwirn successfully earned the appointment of a receiver for the stations on allegations of default.

The FCC processed Form 316 involuntary transfers to move the licenses to the receiver per the court order.
Cherry alleged that the FCC was out of order, and had caused harm to him, depriving him of control of the stations.

Writing the opinion for the DC Circuit, Justice Edwards wrote, “We dismiss Cherry’s appeal because he lacks Article III standing. Cherry alleges that, because of the involuntary assignment of the radio broadcast licenses from Tama to the receiver, he has suffered losses of ownership and voting rights as a Tama shareholder. However, these injuries cannot be traced to the FCC’s approval of the license assignments. Instead, the alleged injuries were caused by Tama’s default on its loan payments, Zwirn’s foreclosure action, and the New York court’s appointment of a receiver. This court has no authority to review these actions. Therefore, even if this court were to overturn the FCC’s action, this would not afford Cherry the relief that he seeks. The appointment of a receiver to take control of Tama’s assets came as a result of action taken by the New York state court, not the FCC. Accordingly, Cherry’s appeal must be dismissed for lack of standing.”

DC Circuit noted that Cherry would have lost control of the stations with or without the FCC’s involvement, due to the court  action in New York in explaining why the action against the FCC was misplaced.