A series of transfer agreements of varying dollar amounts were filed and entered Friday (2/2) by New York-based U.S. Bankruptcy Court Judge Shelley Chapman that absolve the nation’s No. 2 radio broadcasting company by number of stations of its debts to the companies involved.
Nine transfers of scheduled claims were issued early Friday to the entities owed money by Cumulus, directing the companies to New York State’s Vendor Recovery Fund.
By 10am Eastern, five more were issued.
Should the companies have no objection to the claim transfer, they’ll simply need to wait and let the state of New York handle the eventual recovery of funds owed.
If a company objects to the transfer to the Vendor Recovery Fund, they now have 20 days to file a written objection to the Bankruptcy Clerk in lower Manhattan.
The transfer agreements are tied to unsecured claims that the court on Thursday agreed would not be the responsibility of Cumulus, clearing one hurdle for the company as it seeks to slice its roughly $2 billion in debt in half.
The types of business and dollar amounts vary, and five tend to reflect minor payments to small business. Others are demonstratively larger in value.
Now seeking payment from the Vendor Recovery Fund are:
- A&J Generator and Equipment, of Seymour, Conn. : $486.98
- Certified Generator Service, of Knoxville, Tenn. : $1,326.37
- Fleeton’s Lawn Service, of Montgomery, Ala. : $390
- M&M Sports Scene, of Addison, Ill. : $831.08
- Team Enterprises, of Fort Lauderdale, Fla. : $221
- Pr Chemical and Paper Supply, of Pensacola, Fla.: $342.57
- Wizzard Sound Corp., of East Syracuse, N.Y. : $355.46
- Data Network Systems, of Memphis, Tenn.: $4,353.90
- Northeast Towers, of Farmington, Conn.: $1,786.68
- Sada Charity Preview, of Syracuse, N.Y.: $700
- Signal Specialists (Owner: Tom Toenjes), of St. Marys, Kan.: $496
- N&L Services, of San Jose, Calif.: $300
- Mione Family Remodeling, of Harrisburg, Pa. : $8,500
- Radio Engineering Services, of Red Hook, N.Y. : $17,423.33
Radio Engineering Services was founded in 1980 in Northern Dutchess County by David Groth. He has long been active as an engineer working with radio stations across the Mid-Hudson Valley, Catskills and Berkshires.
Reached by RBR+TVBR, Groth said, “Certainly I’m not pleased by what happened. I am working with my attorney and also working with Cumulus, as they were a major business partner with us. They consider us a critical vendor and they are trying to figure out how to work through this so we can reinstate services.”
Groth says that services were suspended in December 2017 under a contract that involves Cumulus’ stations in Bridgeport and New London, Conn., along with occasional consulting work for Cumulus’ New York City stations.
Radio Engineering Services is working with Cumulus to strike a financial plan to resume what has been a strong business relationship. “Cumulus is working with us in a positive way to get everything squared away,” Groth says, adding that there is second set of payments owed by Cumulus that his company is starting to collect on directly from the radio broadcaster.
The nine transfer agreements including that for Radio Engineering Services follow a series of actions made Thursday by the Bankruptcy Court in New York.
In one order, Akin Gump Strauss Hauer & Feld — one of the nation’s largest law firms — was affirmed as counsel for the Official Committee of Unsecured Creditors. Firm partner Michael Stamer is directing the legal activities on behalf of the committee.
In another, the debtors and debtors in possession — reflecting Cumulus and all related parties — have employed and retained KPMG as tax compliance and tax consultants.
But, perhaps the largest order authorizes the debtors — again, Cumulus and its related entities — to reject certain executory contracts. This represents a victory of sorts for the fiscally strapped company.
This move effectively clears Cumulus of owing any money to a series of arrangements that involve a host of professional sports franchises and a former Westwood One employee.
Among the rejected contracts are broadcast rights agreements with the Seattle Seahawks and Buffalo Bills NFL teams; the Chicago White Sox baseball team; and the parent company of the NHL’s Chicago Blackhawks. The Blackhawks arrangement extends to a suite agreement at the United Center in Chicago.
IGT Media Holdings is also a loser, and will not be collecting $286,299 it is owed from Cumulus through an advertising and trade agreement.
Also negated is Westwood One‘s lease of space at the Paragon Business Center in the Santa Clarita Valley of Southern California — an office Westwood One has used since August 2004.
But it is the shredding of a separation agreement with former Westwood One President Bill Battison that may be the most eye-catching.
Battison hasn’t been involved with Westwood One since July 1993, when he exited following a 7-year, 10-month tenure as President of the Stations Group (which famously began with the March 1989 debut of KQLZ-FM 100.3 in Los Angeles as “Pirate Radio” under the direction of Scott Shannon), company CFO and President of NBC Radio.
Since 2013 Battison has been Managing Director of Focus Investment Banking.
While Battison was associated with a company acquired by Cumulus long after his exit, it is actions while at Westwood One that captured headlines six months after Battison’s departure, in January 1994.
That’s when Westwood One settled SEC charges without admitting guilt that it misstated financial statements in both 1987 and 1988, with Battison using improper and fraudulent accounting practices effectively making WW1’s quarterly earnings much rosier than they were ahead of KQLZ’s launch.
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