Doomsday?

If King Kong wishes to grab Pacifica's assets and effectively lead WBAI to market, it can proceed with such a move in less than two weeks. November 13th, to be exact. We don't yet know what the secret society known as the Pacifica National Board will do, but it is clear that gross mismanagement of this body and the stations it owns has hastened this day of reckoning.

Here is the court transcript. 

Some of you may have noticed that yesterday, the judge's decision in the Empire State Realty Trust vs. Pacifica case (that he read in court on Oct. 3) was posted on the NY courts web site, at:

https://iapps.courts.state.ny.us/nyscef/DocumentListdocketId=uaMMUY6yCh6pguddS7CNFg==&display=all

That's where all the filings are for this case. New ones are at the bottom.

However, the clerk for the court had sent the transcript to the wrong judge, who signed it, and there were a few other errors in it. It has since been taken down from the web page above.  So we have a little longer before it is corrected and signed by the correct judge, and re-posted.

While it's possible that starting 2 weeks after it's re-posted, that ESRT could begin the process to start seizing Pacifica assets, Sam Himmelstein, our attorney in the case, has told us repeatedly that he believes ESRT wants to work out an arrangement with us that will work for both parties, without disrupting things for us.

We are still getting information on possible options and hope we can have something specific that the PNB can agree on soon, and which we can present to ESRT as part of a plan to pay the judgement.

We need a plan to deal with more than the judgement, though, as the tower lease runs until 2020, and everyone knows we have found it impossible to keep up with the lease payments. So we need a plan that addresses those. Pacifica also has other very significant financial issues, including unfunded pension liabilities, the FY2016 and FY2017 audits still to do (with some additional funds needed to complete them), and other debt. There's a lot we need to catch up on.  We need a plan to handle the cash flow of all that plus our ongoing activities, as we have no extra revenue that can pay for the remaining years of the ever-increasing tower lease, or interest on a bridge loan.

Good news includes that KPFT, KFPK, and WPFW just concluded successful fund drives. KPFA concluded their fall fund drive a day early, last month. WBAI had to add a fifth week to theirs, though, and it's still continuing.

I want to assure everyone that we will not allow ESRT to seize Pacifica's assets and clean out our bank accounts. I realize that's what people are afraid of, but that's not going to happen. Chapter 11 bankruptcy (which would stop collection efforts while we continue to operate, until we can develop a plan to pay creditors) remains a possibility, but we want to avoid that because there are significant costs to the bankruptcy itself, plus some other issues, even though there are some advantages.  A bridge loan is also being considered, but both Sam Agarwal (our CFO) and I feel it should be part of a bigger plan, that includes how to pay off the loan itself as well as other 

obligations as noted above, such as the remaining tower lease. The PNB will be reviewing what information we have so far, this Thursday evening, and I think they soon will have enough info so they can make a decision about how to move forward on all of this.

Bill Crosier

Pacifica interim Executive Director

kpft@crosierbiomed.com

713-641-4941 (home), 713-305-5346 (mobile)

KPFT - 90.1 FM Houston - Radio for Peace  http://kpft.org

Pacifica Foundation http://pacifica.org

The following letter was posted today, November 1, 2017, by Steve Brown, who recently has kept a low profile.

Dear Pacifica Supporter:

To bring you up to date, in case you missed my prior emails: 

On Oct. 6, the Empire State Building corporation (a $3 billion realty trust) won a claim against the Pacifica Foundation for $1.8 million. It claimed that it was owed this amount for unpaid rent on WBAI’s broadcasting transmitter. The judge ruled—as irrelevant— Pacifica’s argument that it was being gouged by Empire State, which had been charging the foundation four times the current market rent, and that the “elevator clause” of the lease – raising Pacifica’s rent by 9% every year -- was “unconscionable.”

On Oct. 31 (yesterday), the judge posted his official order, setting Nov. 13 as the date on which Empire State could begin seizing Pacifica’s bank accounts and other assets. This would leave the foundation without any cash to pay for phones, electricity, salaries, etc., possibly shutting it down and forcing it off the air for the first time in its 68-year history.

Is there a solution? Of course there is. It’s just that management refuses to act on it. In fact, management seems not to be acting responsibly at all, as the “doomsday clock” ticks down for Pacifica. I have held back from publicly criticizing management until now, because of the good work it has done since taking over from the prior “rogue” management and board of directors, which had destroyed Pacifica’s finances. But I must criticize them now for not applying the correct solution to Pacifica’s debt crisis before it is too late.

What is that solution? It is simply to mortgage or sell some of Pacifica’s unused and underutilized real estate. (Our business is radio, not real estate.) This would bring in more than enough to pay the $1.8 million judgment and prevent Empire State from seizing Pacifica’s bank accounts and forcing it off the air. Pacifica would then have two to three years in which to recover and move forward. 

Unfortunately, management and a number of board members – without any real knowledge or experience in such matters – mistakenly believe that the foundation should declare bankruptcy. But it is clear, from the advice of five eminent bankruptcy attorneys, that this would be disastrous and, ironically, would ultimately force Pacifica to pay – not just $1.8 million – but more than $8 million. And Pacifica would have to sell its real estate anyway.

So why isn’t Pacifica doing the sensible thing? Because, in addition to poor judgment by management, there is self-serving factionalism among board members, some of whom seem to have private agendas that violate their fiduciary duty to the foundation. So unless their minds (or attitudes) are changed, this account of the problem that I have just sent you -- is worthless. It merely alerts you to an impending train wreck, which you must stand by and watch in horror, but are powerless to prevent. 

Since the advice of leading debt and bankruptcy authorities is being ignored by management, perhaps an outpouring from Pacifica’s thousands of supporters might be more effective. So if you have the time and the will – that is, if you haven’t yet given up on Pacifica – you might send an email urging immediate mortgage and/or sale of Pacifica’s unused or underutilized real estate to pay off the Empire State judgment before the Nov. 13 deadline date.

Here are the addresses of the Executive Director, Bill Crosier; the Chief Financial Officer, Sam Agarwal; and the Pacifica National Board. You can send one email to all three. kpft@crosierbiomed.com; sagarwal@pacifica.org; pnb@pacifica.org

I wish I had better news to share with you.

Stephen M Brown

sbrown13@nyc.rr.com