Updated at 8:59am, Nov. 17
NEW YORK — The Ninth Circuit U.S. federal appeals court has overruled a motion filed by Ed Stolz in his California federal district court case that sought to put a stop to the auctioning off of the radio stations associated with Royce International Broadcasting.
This reflects former receiver Larry Patrick over unpaid music royalty payments, and not the fight waged in a Nevada federal court involving Norma Guariglia, of Reno, Nev., based Harris Law Practice LLC, which RBR+TVBR incorrectly reported on November 15.
The error demonstrates the complexities and multiple filings made by Stolz in a desperate attempt to save his stations despite years of complications surrounding their operations.
The California federal district court decision from two Ninth Circuit Judges puts the wheels in motion on what could very well be the final chapter in a long, quixotic saga by Stolz to somehow retain control of his radio stations.
On Tuesday, court-appointed trustee Michael Carmel filed a final asset purchase agreement notice with the Nevada bankruptcy court that all but codifies the previously reported winning bids detailed by RBR+TVBR on October 27.
The California ruling, while not linked to Carmel’s activity, nevertheless keeps the recent sale of the stations authorized by the Nevada bankruptcy court on track.
Indeed, the asset sale agreements were affirmed in the Nevada court, with Tuesday’s actions all but ending Stolz’s efforts to stave off the dissolution of his broadcasting business.
As previously reported, the biggest headline from the court-sanctioned sale of Stolz’s stations involves the purchase of Class A KREV-FM 92.7 in Alameda, Calf., serving San Francisco and Oakland.
The winning bidder is Friends of KEXP, the group that since 2014 has operated influential and highly successful eclectic Adult Alternative KEXP-FM 90.3 in the Seattle-Tacoma market. A $3.75 million purchase price was secured by the group in the Carmel-administered auction, with a $300,000 deposit being made by Friends of KEXP.
According to the San Francisco Chronicle, a donor letter from CEO Ethan Raup was sent to KEXP supporters on November 16 sharing some of the details as to what lies ahead in the Bay Area. It also noted that funding came from a $10 million endowment bestowed upon Friends of KEXP six years ago from a supporter.
“After working out a few technical and regulatory details, we are now operating with the assumption that the FCC will approve the transfer of the broadcast license and KEXP will be taking full ownership and operation of the Bay Area radio station within the next few months,” Raup said.
And, it could present a good test case with respect to the draft Notice of Proposed Rulemaking authored by FCC Chairwoman Jessica Rosenworcel presently being circulated among the Commissioners that would put regulatory preference toward stations demonstrating local content, presumably in support of journalism’s long-term health.
KREV would be programmed from Seattle; a “local music show” for KREV is anticipated to debut “within the first six months” of launch. But, is that “local” in the eyes of Rosenworcel? Will the FCC dally on approving the license transfers as KREV will not maintain a local presence?
The same question could impact the other notable buyer of Stolz’s soon-to-be former stations: VCY America. Like many large broadcast ministries, including KLOVE and Air1 owner Educational Media Foundation, there is no local programming. But are noncommercial educational stations exempt from the NPRM drafted by Rosenworcel? Details remain scant.
After a failed attempt in the California case to buy all of Stolz’s FMs for $6 million (the Ninth Circuit essentially affirmed that court’s decision to allow Patrick to auction them off and sell them), VCY America successfully secured KFRH-FM 104.3 in Las Vegas and Palm Springs, Calif.-based KRCK-FM 97.7; and three FM translators in the market — K251BX at 98.1 MHz, K238AK at 95.5 MHz, and K276GX at 103.1 MHz in Palm Springs, Calif. The final price being paid by VCY America is $2,445,952.88; a $450,000 deposit is being made by VCY America to the court.
Lastly, the winning bidder of KBET-AM in Las Vegas is AutoPilot FM. That’s the entity that has been programming a placeholder format under a LMA with Carmel on KFRH and on KREV-FM in San Francisco — hip-hop focused “HU$TLE.” As previously reported, a $150,000 purchase price was agreed to, with a $10,000 deposit to be made.
With asset purchase agreements finalized and submitted with the Nevada bankruptcy court, and with the Ninth Circuit appeal from Stolz denied, the sale of his stations is a go.
In Nevada, opposition filed from attorney Norma Guariglia at Harris Law Practice was denied. But, Harris Law Practice filed no motion with any court to stop the auction, which was held on October 26. Rather, the Reno-based law firm — on behalf of itself as an administrative creditor of the bankruptcy estates — filed an opposition to confirmation of the sale with the Nevada federal bankruptcy court “on grounds that the sale procedures violated certain provisions of the Bankruptcy Code,” Guariglia told RBR+TVBR in a letter sent early Friday.
