Creditors ask bankruptcy judge to force Inner City Broadcasting into
(August 22, 2011) A large radio broadcasting company targeting
African-Americans and founded by civil rights leader Percy Sutton could
wind up under the control of billionaire Ron Burkle and other creditors
seeking to put it in bankruptcy.
Three creditors asked a bankruptcy judge to put the parent of Inner City
Broadcasting Corp into Chapter 11 after the owner of "urban" radio
stations around the country, including WBLS and WLIB in New York, pulled
out of a deal to restructure its debt.
In a filing Saturday with the U.S. Bankruptcy Court in Manhattan, Burkle's
Yucaipa Corporate Initiatives Fund II LP, Drawbridge Special Opportunities
Fund Ltd and Fortress Credit Funding I LP said they are owed $254 million
by the parent, Inner City Media Corp.
The creditors said Pierre Sutton, the company's chairman and a son of
Percy Sutton, scuttled a proposed prepackaged bankruptcy that would have
paid unsecured creditors in full, and allowed a small payment to equity
holders, which is unusual when a company is insolvent.
The creditors accused Pierre Sutton of rejecting the proposed deal to gain
a bigger payout for himself, and ushering in new directors and replacing
restructuring advisers who had recommended the prepackaged bankruptcy
A lawyer for Inner City Media did not immediately return a call for
Percy Sutton, who died in 2009, was a civil rights lawyer who represented
Malcolm X and was also the longest-serving president of New York's
During his time in office he formed Inner City and bought WLIB, making it
the New York's first black-owned radio station.
The company went on to own as many as 18 radio stations as well as the
Apollo, the famed theater in Harlem, and produced the amateur talent
program "It's Showtime at the Apollo."
The company no longer owns the theater or produces the show.
The lenders plan would have given them the majority of the equity in the
company and a reduced amount of debt. Shareholders would have received
$1.2 million in cash, a 2 percent stake in the company, and warrants for 6
percent of the common stock and stock options of management.
The proposed plan also included a five-year employment agreement for
Pierre Sutton with a $600,000 annual salary.
ICBC issued the following statement through its public relations firm:
"Our radio stations remain on air, and our programming is intact. We are
in active discussions with our new creditors. Our independent committee of
directors continues to evaluate all of our options, and we look forward to
arriving at an agreement that respects the Company's storied legacy and
better positions us to achieve continued long term success."
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