ESRT UPDATE FROM PACIFICA iED
December 14, 2017 - 3:40 PM EDT Please excuse the cross-posting, but I want to get this out widely to Pacifica folks.
Empire State Realty Trust has filed their judgment in California. This means that after 30 days from then (on Jan. 12) that they can start seizing Pacifica assets in California, if the PNB does not come up with a way to pay the judgment before then.
We learned yesterday afternoon that ESRT also filed in Texas, which does NOT have a similar 30-day waiting period. I assume we may learn soon about NY and DC.
Those are public so you can share with anyone. If/when similar filings are made in NY or DC, I'll upload them, too.
Some Directors have arranged for a broker, Marc Hand, to try to help get us a loan, to provide money to pay ESRT until we can get money from a signal swap to pay off the loan. Theoretically, we might be able to get money to pay off a loan and other critical financial needs from elsewhere, although an option like selling buildings is unlikely to generate enough funds. We got all of our buildings appraised, and the two for which we were hoping might be more valuable turned out not to be so. The Nakapon/National Office building, next door to KPFA, appraised at only $770K, but I have signed documents with a broker to list it for $1.5 million. The real estate broker has said there probably won't be much interest until January and of course we may have to wait a long time to get an offer for as much as we'd want. The KPFT property was appraised at only $1.2 million and if it was sold, there would not be much money left over after paying for a new location, building out, and moving.
Just to remind everyone - Pacifica has about $8 million in debt overall, plus we owe about $2 million more to ESRT for the remainder of the tower lease on the Empire State Building. ESRT's judgment only covers what we owe up to last May, when they filed for summary judgment, and legal fees will have to be added to the $1.8 million you know about. Also, because we've paid nothing to ESRT since June, we have been accumulating another $60K in debt each month, with the amount going up each January. Including what we need to pay ESRT, plus unfunded pension liabilities and other near-term obligations, we need $5-6 million very soon. And even with that, we'd have at least $4 million in other debt. Remember we don't have the cash flow to pay anything on the ESB tower lease, and we are struggling to pay other bills.
Marc Hand has experience getting loans for non-profit stations, and he seems to be working hard to help us. But we don't have a specific loan or even lender confirmed yet, and I don't know if we'll find one soon enough, or if the terms would be acceptable. Some Directors (independently of Marc Hand) found another loan previously, with an interest rate that was not too awful (9%), but when we got the loan documents they were terrible, and signing them would have put us into default immediately and would have allowed the lender to foreclose and take the collateral (which would have been the KPFK/PRA building). So nothing happened with that loan.
Perhaps Marc Hand can get us something better. He thinks he can, possibly using all of our properties as collateral, but most of the stations he's worked with in the past have better credit than us and don't have $8 million in debt with inadequate cash flow to pay all the bills. ESRT knows we are looking for such a loan and are waiting to see if we can do that, as it will be the quickest and easiest way for them to get money from their judgement. But we may not find an acceptable loan in time. And now ESRT could move to seize assets almost immediately in Texas, if they get tired of waiting, and they can file similarly in NY and DC (and might already have done so, as it takes a few days for us to find out). While ESRT attorneys have told our attorney that they'll warn us before collecting on their judgement, we still have no written forbearance agreement with them, and we don't know if the warning will be a month, or a week, or a day.
We've also learned from our attorneys that getting a loan before filing for bankruptcy could be very bad, as bankruptcy would then not protect the collateral of the loan.
This week, I, CFO Sam Agarwal, PNB chair Jonathan Alexander, and vice-chair Sabrina Jacobs spoke with Elizabeth Kim and Julianne Mossler, Deputy Attorneys General for California in the Office of Charitable Trusts. Ms. Kim asked if Ms. Mossler could speak to the PNB about their fiduciary responsibilities, and of course we said yes, and she did call into the PNB meeting last night and talk to the PNB for about 9 minutes. If you want to hear it, it's about 10 min. after the start of the meeting, and you can listen to or download the audio here. [Ms. Mossier's speech and an important excerpt from the meeting are linked to in our post below].
In last night's PNB meeting, Sabrina Jacobs (PNB vice-chair) and I presented a motion (see below) about preparing for filing chapter 11 bankruptcy. Similar motions have been presented to the PNB twice before but were not approved. We both feel it's more urgent now that ESRT has filed their judgment in both California and Texas so they'll be ready to seize assets. An earlier authorization (in Oct.) to prepare for bankruptcy was rescinded a few weeks after it had been approved. Some preparations were made (some of which are also useful in preparing for the FY2016 audit), but other work would be needed so that we'd be able to file all the information required for bankruptcy within the required 2 weeks after filing for bankruptcy itself. The PNB last night voted to postpone consideration of the motion, until they talk again with a bankruptcy attorney.
We are having an emergency PNB meeting on Monday night with two bankruptcy attorneys, and I hope the PNB will take necessary actions then to deal with the situation.
I'm worried because we are depending on ESRT being nice to us and giving us time, while they are clearly making preparations to seize our assets. I do not know how long they will wait for us to come up with the money for the judgment.
Just hold out until Christmas. Santa will come down your chimney and help you out.
ReplyDeleteWhat was that about chickens coming home to roost? This is what you get for playing political games and not taking the business side of things seriously.
SDL
As far as I know, there is no waiting period to enforce a judgment in New York. Since the ESRT judgment is a New York judgment, it became enforceable when it was entered. The judgment had to be filed in other jurisdictions (Calif., Texas, D.C.) before enforcement because in those jurisdictions it is a "foreign" judgment. The ERSRT may be waiting until January 12, so that it can swoop down on all of Pacifica's assets at one time, so that enforcement in one jurisdiction does not finally motivate the Pacifica Board to seek bankruptcy before assets can be seized in all jurisdictions.
ReplyDeleteI kinda doubt that we'll be able to hear more of the car wreck on Monday
ReplyDeleteI fail to see how they can survive, but they’ve proven me wrong on that count before, more than once, in a sense for many years, surviving by shrinking further and further and further, in effect drawing down the inherited assets of their frequencies.
ReplyDeleteFar as I can see they tend to perceive their ‘cash flow’ as if it were some secondary matter when clearly it’s primary and fundamental as is obvious to any sane observer. An organization with a temporary cash flow problem is one thing. This is another, entirely, yet of course they’re in various forms of denial.
ESRT may in fact be being somewhat patient and willing to warn as Crosier says, but it’s also possible that that bit of information from their pro bono attorney is wide of the mark. He’s been telling them pretty much what they want to hear from moment one so far as we can tell from the publicly available information.
They have at least $8m in debts, no functional management, ever-declining listenership, and no reason for their existence other than in their own little imaginations, as they eternally snap and snarl at one another.
I’ve yet to see how they might possibly hope to provide Ch 11 with a plan to survive, which is a requirement for entering Ch 11, since as I understand it that is a requirement and such plan must not be predicated on any increase in contributions.
No major donor angels are in sight, with the possible exception of the Pacifica Archives rather than Pacifica as a whole.
Their ‘mission’, so far as I can see, is to continue to fail.
Yup, looks good.
This is a fight for control pure and simple. Folks who could never get a license descended on Pacifica and took advantage to gain control. The programming is a mix of members of this group who sincerely believe they're entitled to their time slots and above such mundane things like ratings and others using the station to pursue their own interests. This latter group can be identified easily. They never mention the station once or get involved in station affairs in any way.
ReplyDeleteWhether these factions have a deliberate plan or just got caught up in the infighting is debatable but the results are the same. The business side suffers because of an unwillingness to change.
Change the programming? No. Change the management? No. Underwriting? No. Leasing time? No.
Redo the website? No. What about..No. No. No.
I happened to see Haskins in Walmart the other day asking what isle's could he find
ReplyDeletethe megaphones and soapboxes in . Overheard him saying that he needed quite a few.
Also mumbling something about Africa... True Story .. haha
The silent carrier show has been on for a couple of hours, at least. They are broadcasting on the website, though.
ReplyDeleteSDL
It went out right after another re-broadcast of Gary Null/Tony Bates repetitious harangues about Null's "Brain Stuff" premium. The outage is probably another good excuse for Reimer's to extend the "mini-fundraiser".
DeleteSometimes silence is golden. The last time I asked Alexa to get me WBAI, she brought me another run of Gary Null splashing buckets of personal fantasy on Tony Bates as he once again wallowed in the fairytale of Null the Healer. One could almost see him move his saintly fingers to give his holograph halo that extra rub of Sparkle™. Bates—getting impatient on the other end of WBAI's working telephone—painted his Horatio Alger tale vividly. You know, the otherwise untold story of his miraculous metamorphosis from country hick to benevolent healer.
DeleteI was not riveted this time, either.
Yes, Reimers can and probably will point a little finger at dead air when questioned about the dismal amount that rests at the bottom of WBAI's tin cup. He may also mumble that it is time to move on....
to another cup-shaking beg-athon.
1:37PM and now the transmitter went off the air altogether...
DeleteSDL
Perhaps prayer does change things.
DeleteDid I say this is no way to run a radio station?
Considering they haven't paid the rent in seven or eight months, you have to wonder...
DeleteSDL
They are feeling the hot breath of a big ape, but they think it's a gust of government-generated climate.
ReplyDeletePerhaps ESRT has pulled the plug? Is there a way to find out?
DeleteI don't think that's the case—not yet. If you read what Bill Crosier says (above) I think you will regard the actual plug pulling as something being led up to rather than an immediate occurrence.
DeletePerhaps I read it wrong, but I think the pulling of the plug is a near-future event.
As long as Pacifica has assets, it would foolish of the ESRT to pull the plug because Pacifica could argue that such an act terminated the lease. Terminating the lease would only make sense for ESRT if Pacifica's lease were below the current market rate.
ReplyDelete