- the judgment plus additional unpaid lease amounts that have accrued since May, plus interest and legal fees, and the rest of the tower lease, and unfunded pension liabilities and penalties that we need to pay in the next few months for all stations, to cover the last several years.
Tuesday, November 7, 2017
Outside looking in...
As November 13, 2017 looms large, we have heard a variety of proposed solutions, mostly from people who don't know what they are talking about.
The people at Spark News know the world of community radio better than most, so let's take a good look at the options they published today, November 7, 2017.
Tracy Rosenberg asked:
Did the PNB authorize this fundraising for bankruptcy? (Kind've a dumb idea. All the people who donated to pay for the audits should ask for their money back. I'm going to. I didn't give you money for this garbage).
If not, you need to have better control over what information your employees distribute to their coworkers.
Below you will find a little more why-bankruptcy-is-the-worlds-worst-idea material. As if you haven't seen enough by now.
KPFA's Program Director, Laura Prives, wrote:
Pacifica Needs Our Help
Everybody knows the financial pressure the foundation is under and we’re all hopeful that together we can find a way to turn around the Pacifica foundation's financial situation.
On November 14th the Pacifica Radio Archive will air their yearly pledge drive and KPFA will host a second day billed as building a bigger and stronger network on Wednesday, November 15th. KPFA has been asked by the National office to host this extra day of fundraising for the upcoming struggle to stay on the air.
Additional fundraising is not exactly what any us want to do, but under the dire circumstances, I hope you’ll join in and do your best to raise a $150 thousand dollars all five stations will be working towards. Bill Crosier and Sam Agarwal have informed us the funds raised will be used as a down payment for our bankruptcy lawyers.
I apologize for the late notice. Please email me directly at firstname.lastname@example.org if you have any questions.
I'll be contacting folks to host and pitch today.
Thanks for your patience and please hope for a better future for Pacifica,
Bill Crosier reacted:
About the extra fundraising we need (and plan to do on Nov. 15 in a national fund drive, immediately after the Nov. 14 PRA annual fund drive):
I was not there, but apparently things were not reported quite correctly at KPFA's LSB meeting on Saturday.
It's true that a few weeks ago, after the judge issued his decision in the ESRT case about the unpaid WBAI tower rental, chapter 11 bankruptcy was looking more likely. We knew that if we had to file ch. 11 in order to prevent ESRT from seizing assets, we would need at least $150K for just paying a retainer to get a bankruptcy filing started.
Since then, Sam Himmelstein has urged us not to panic, and we are hoping to avoid having to file for bankruptcy. Chapter 11 bankruptcy does have certain advantages (including stopping collection activities by ESRT and any other creditors, and giving us more time), but it also brings additional significant costs and difficulties.
We have started the process for applying for a loan, using a building as collateral. It may take a couple of weeks to get the loan approved, and after that the PNB will still have to approve the actual loan. A loan cannot be the whole solution to the ESRT tower lease problem, though, because a loan will have high interest payments because of our bad credit and because it just refinances part of the debt. We need more than just the minimum needed to pay the judgment. The loan will NOT provide enough funds for all this:
Plus we have several million more of other debt, but just let me address the above for now.
We are looking for frequency swaps, for WBAI or WPFW (not both) to provide funds that won't have to be paid back. A few Directors have suggested selling buildings to do that, although I don't think that will provide enough usable net cash unless all buildings are sold, which I don't see as feasible. But either a frequency swap or selling buildings may take time to finalize, and it became clear that if we don't have to file for bankruptcy, we are likely to need the loan more for some of the other obligations noted above, so we don't end up back in court in a few months.
So I think we may need $150K or more soon, whether we use it for a retainer for bankruptcy (again, which I hope we can avoid), or for paying interest on a loan that we may need very soon.
But both Sam Agarwal and I want everyone to know that perhaps the worst thing to do would be to get a loan using a building as collateral without a decision by the PNB on exactly how we're going to pay back the loan. It would be dangerous to risk losing one of our buildings to foreclosure in a few months when we can't make the interest payments, or at the end of the loan if we can't pay back the principal. If that happens, we'll probably be in bankruptcy anyway, but with an additional problem that we don't have now (loan in default).
We're still waiting on some offers that I think will come soon for frequency swaps, but we don't have them yet so we can't decide which one to take until we actually have at least one offer that's acceptable.
But stay tuned over the next couple of weeks, as we get more information.
In the meantime, today the transcript and judge's order was posted (and signed by the correct judge this time) on the NY courts web site for the ESRT case. It will still be at least two weeks before anything else can happen, but we need to remain vigilant about that.