Air America Radio files for bankruptcy
(Crain’s) — Air America Radio, the liberal talk-radio network that got its start with the capital infusion of Chicago-area investors Sheldon and Anita Drobny, has filed for Chapter 11 bankruptcy protection.
The national network featuring Al Franken and Jerry Springer filed bankruptcy protection documents Friday in U.S. Bankruptcy Court in the Southern District of New York, confirming longtime speculation that the fledgling network was mired in financial problems.
Since launching in March 2004, Air America Radio has struggled under significant debt, according to bankruptcy documents. The company was never profitable, losing $9 million in its first year of operation, $19.6 million in 2005 and $13 million in 2006, documents showed.
A spokeswoman for Air America declined to comment beyond a company press release.
- You May Also Like
- Suggested Searches
“This regrettable action became necessary only recently when good faith efforts to resolve outstanding debt with a creditor from the company’s earliest days broke down,” the company said in a statement.
The Drobnys, considered the mother and father of Air America Radio for their capital investment, could not be reached for immediate comment.
Mr. Drobny, chairman and managing director Northbrook-based venture capital firm Paradigm Group II, sold most of their initial investment but then later helped form Piquant LLC to regain control of the radio network when it fell into financial problems soon after its debut. They retain a minority stake in Piquant and are not active in Piquant, the spokeswoman said.
Last year the couple formed Nova M Radio LLC to buy underperforming radio stations in medium to small markets so it could convert the programming to Air America’s lineup and expand the liberal network.
Air America Radio has secured debtor-in-possession financing through Democracy Allies LLC to keep operating during its reorganization process, the company said.
“Nobody likes filing for bankruptcy, however, this move will enable us to concentrate on informing and entertaining our audience during the coming months,” Scott Elberg, who was named CEO on Oct. 8, said in a statement. “Staying on the air is crucial for the network’s primary ratings period as well as for the country which is facing its most important mid-term election in recent history.”
