Wednesday, February 07, 2007

Details of AAR Purchase Agreement Revealed

Updated, February 8, 2007, 11:15 am pst, (update in bold)

It appears that Stephen L Green, the expected new owner of Air America Radio is getting a pretty good deal as he finalizes the arrangements of his purchase of bankrupt liberal talk radio network.

Details of the pending the purchase were revealed today in purchase documents published by Smoking Gun website. Here's what the Smoking Gun reported:

Bankrupt and about to lose Al Franken, its marquee star, Air America Radio is set to change hands for the bargain price of $4.25 million, according to new court documents. The sales figure was disclosed in a purchase agreement filed yesterday in U.S. Bankruptcy Court in New York. According to the agreement, the deal between Air America's owner, Piquant LLC, and a firm controlled by Stephen L. Green, a New York realtor, calls for Green's firm to repay up to $3.25 million in loans provided to Air America after the liberal radio network filed for Chapter 11 protection last October (the company listed debts of $20.2 million). Green's company will also give Piquant LLC $500,000 and pay off up to $500,000 in network debts (the bulk of which, $349,000, is owed to the network's Manhattan landlord). Green's bid topped by more than $1.25 million the nearest offer received by Air America, according to a motion filed along with the purchase agreement. An excerpt from that motion can be found below. Court documents do not specify how many bids were received for the network, though a filing notes that "more than ten interested parties" signed nondisclosure agreements and were allowed to review confidential network financial and corporate records. While Green controls the corporation purchasing Air America, two of the firms that were pre-bankruptcy investors in the radio network will "collectively own a minority interest" in the Green company. The Air America purchase is expected to be finalized at a court hearing in the next week. Franken, who is planning to run next year for a U.S. Senate seat from Minnesota, is scheduled to do his final Air America show on February 14.

It appears that while ten or more bids were received for AAR, the Green bid was substantially higher than any others. The next highest bid was around $3 million which was over 25% lower than Green's successful bid.

Meanwhile, AAR founder Sheldon Drobny has taken another shot at the struggling lib talk network. In a posting on the Huf Po on February 8, Drobny called the pending deal to sell AAR to the Greens a bad deal for the creditors.

"Unfortunately, like most everything that the MSM fails to report about, there is a hesitancy to expose this by them because the bankruptcy system essentially protects the rich entrepreneurs and screws the creditors and shareholders," Drobny posted. "Enron is but one of many such scandals that go on every day."

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