A Hearing Designation Order issued to two parties involved in the proposed transfer of control of two AM radio stations and an FM in El Paso, Tex., has been terminated.
Why? Those involved in the proposed sale have requested a withdrawal of the sale applications.
The unwind involves the intent of handing Lorena Margarita Peréz Toscano full ownership of KAMA-AM 750, KQBU-AM 920 & KBNA-FM 97.5 “Qué Buena” in El Paso.
At present, these stations are licensed to 97.5 Holdings LLC, with Luz Maria Rygaard a key individual associated with the current ownership scheme.
The transaction raised a series of questions to the FCC’s Media Bureau, resulting in the January 23 report from RBR+TVBR that a HDO in front of a FCC Administrative Law Judge would be necessary to sort out alleged improprieties and advance transfer of control claims.
The intended sale of the three stations was engineered in June 2023. It also involves a petition seeking the FCC’s OK to put 100% ownership in the hands of Toscano, a citizen of Mexico. Handling the paperwork as legal counsel for that request was Fletcher, Heald & Hildreth Partner Francisco Montero.
The seller’s owner composition requires a brief history. At first, 97.5 Holdings LLC was 25% owned by Grupo Radio Centro, and it paid $2 million to purchase KAMA-AM, KQBU-AM and KBNA-FM from Univision Communications to obtain it in a transaction announced in November 2016. In early 2022, GRC and 75% equity interest holder “97.5 Investment TX,” led by Rafael Marquez Aguirre — a U.S. citizen and an “alternative director” of GRC — agreed to sell this stake in the three stations to Rygaard.
The wife of Quentius Rygaard, whose has held positions in the entertainment industry. Luz Maria paid $10,000 for all of Marquez’s and GRC’s shares in the stations; the transaction closed in May 2022. Fast-forward to June 2023, when Rygaard filed paperwork with the Commission indicating her desire to sell her entire interest in KAMA-AM, KQBU-AM and KBNA-FM to Pérez. The FCC filing including a testimonial from Montero in support of Pérez, who is associated with Mexico’s NRM Comunicaciones, today the owner/operator of three radio stations in Mexico City: EDM-focused “Beat 100.9,” Latin Contemporary Hit Radio “Oye 89.7,” International Adult Contemporary “Stereo Cien,” and Tropical AM simulcast “Sabrosita.”
A $10,000 deposit was agreed upon, with a total purchase price of $2,451,565 codified in an asset purchase agreement.
The proposed deal arrived at the Media Bureau, and it had many questions, leading acting Chief Erin Boone to assert that Rygaard and Pérez already engaged in an unauthorized transfer of control. The Media Bureau also asserted that the two parties engaged in misrepresentations and/or lack of candor in their dealings with the Commission regarding this pre-authorized change in ownership.
The key issue: the Media Bureau discovered that Toscano already holds the right to collect the repayment of a debt owed by Rygaard to GRC in the amount of $2,451,565.
This is the exact price show in the asset purchase agreement that Pérez was willing to pay Rygaard for the three stations.
The transfer of control application approved by the FCC that gave Rygaard full ownership of the three stations made zero mention of outstanding debt or any loan agreements.
Even more worrisome for the Commission is that Pérez is Rygaard’s cousin.
Another pertinent fact about this debt is that Grupo Radio Centro assigned the right to collect that debt, initially a 2017 capital investment GRC made in the three stations, to Toscano. In exchange, GRC would obtain $1,987,500 immediately prior to agreeing to sell control of the stations to Rygaard for the aforementioned $10,000.
“No further explanation of the debt, its origin, or the terms of any loan agreement were included with the Transfer Application, nor were copies of a debt instrument or related agreements, if any, attached to the application,” Boone said. “The Transfer Application made no mention of a time brokerage agreement or advertising sales agreement and gave no indication that the stations were programmed by any party other than the licensee.”
Furthermore, Rygaard and Pérez each said that the written agreements submitted to the Commission “embody the complete and final agreement for the sale or transfer of the station(s).” The Media Bureau contends that relevant information had been omitted and sent a Letter of Inquiry to Rygaard. In her response, for the first time, it was disclosed that KBNA-FM and KAMA-AM were under a sales and programming operational agreement with an entity named Pro Radio LLC. That relationship evidently commenced in November 2021, even though the LOI response states the LLC wasn’t even formed in the State of Texas until August 2022.
Who are the principals of “Pro Radio”? It is Pérez and her two sisters, who had been previously named Secretary and Treasurer upon closing the transaction with Rygaard.
There’s more: Rygaard herself had apparently become an employee of Pro Radio while still holding the license for KAMA-AM, KQBU-AM and KBNA-FM. Then there is Rygaard’s uncle and Pérez’s father, Trigio Javier Pérez de Anda, reportedly an officer in “97.5 Holdings LLC”
Where is the original copy of the Pro Radio programming agreement with Rygaard? There isn’t one, as the FCC was told in the LOI response the arrangement was “unwritten” and that neither party was aware of the requirement that such agreements be written and placed in the stations’ public inspection files. “Despite the fact that the LOI had instructed the licensee to reduce any such programming agreement to writing and provide it to the Bureau as part of its LOI Response, the licensee failed to do so,” Boone said.
Given the apparent violations, and Boone and the Media Bureau noting the LOI response raised more questions than it resolved.
