Air America files for bankruptcy

[Associated Press]

Air America Radio, the liberal talk and news radio network that features the comedian Al Franken, has filed for Chapter 11 bankruptcy protection, a network official told The Associated Press.

The network had denied rumors just a month ago that it would file for bankruptcy protection. On Friday, Air America spokeswoman Jaime Horn told the AP that the filing became necessary only recently after negotiations with a creditor from the privately held company's early days broke down.

Horn declined to name the creditor with which talks had reached a logjam. The company will operate in the interim with funding from its current investor group, Horn said.

In addition to Franken, the network also features shows from liberal talk show host Randi Rhodes and syndicates shows from Jerry Springer and Portland, Ore.-based talk show host Thom Hartmann.

According to documents filed with U.S. Bankruptcy Court for the Southern District of New York, Air America owes Franken $360,750 and $9.8 million to RealNetworks Inc. CEO Robert Glaser, who owns 36.7 percent of the company and had previously served as its chairman.

Tracy Klestadt of Klestadt & Winters LLP, an attorney for Air America's parent company, Piquant LLC, said Rob Glaser had resigned as a director as of Friday morning. Glaser, along with two others, is providing new financing through Piquant investor group Democracy Allies LLC.

Horn said Franken was traveling and was unavailable for an interview on Friday. Horn said Franken would comment on the bankruptcy protection filing on Monday.

Air America also said Friday it had named Scott Elberg as its new CEO. Elberg, who had worked at WKTU and also was a former general manager of the radio station WLIB in New York, has been with the network since May 2005.

The filing and executive shuffle marked the latest turbulence at the liberal talk radio network, which went on the air two years ago. This April, Danny Goldberg stepped down as CEO and was replaced by an interim chief executive from a management consulting firm.

"Nobody likes filing for bankruptcy," Elberg said in a statement. "However, this move will enable us to concentrate on informing and entertaining our audience during the coming months."

Air America has struggled financially since its inception. Documents filed with the bankruptcy court show that the company lost $9.1 million in 2004, $19.6 million in 2005 and $13.1 million so far in 2006.

Air America also disclosed in the court documents that two directors departed in the last two months, Douglas Kreeger and Tom Embrescia. Gary Krantz also departed as president in June, and executive vice president Tom Athans and chief operating officer Carl Ginsburg left in July.

article originally published at http://www.newsvine.com/_news/2006/10/13/398954-air-america-radio-files-for-chap....

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