The owners of five La Crosse area radio stations are seeking an end to bankruptcy proceedings after reaching an agreement with creditors.
Mississippi Valley Broadcasters filed a motion Wednesday asking a federal judge to dismiss bankruptcy cases for the company and a subsidiary, which together own WXLR-FM (Magic 105), KQEG-FM (Eagle 102.7), WKBH-FM (Classic Rock 100.1), WQCC-FM (Kicks 106.3) and WLFN-AM (Today’s Talk 1490) as La Crosse Media Group.
The company filed for Chapter 11 in July, saying it had been unable to maintain minimum deposits required under a loan agreement with Coulee Bank that also precluded payments on a 2007 loan from the estate of former co-owner Howard Bill. Last year, a La Crosse County judge awarded the Bill estate a $1.1 million settlement for the unpaid debt.
Managing partner Pat Smith said in court filings that the stations as a group continue to turn a profit. As of April, the company listed about $3.3 million in assets and a little more than $3 million in debts.
Smith retained a media brokerage firm in November to find a buyer for the stations, but according to Wednesday’s filing, none of the bids would have generated enough cash to pay off all the debts.
In a court affidavit, Smith said based on the experience of the broker it’s unlikely the stations would fetch a higher price in liquidation, especially if they go off the air.
Mississippi Valley Broadcasters told the court that the Bill estate has agreed to “a substantially reduced” settlement, which would be paid by the company’s partners and would not affect any of its current assets. MVB said Coulee Bank has also agreed to modify its loan agreement.
According to the court filing, the primary creditors agree bankruptcy would only result in additional expenses and wouldn’t provide any “substantive benefit” to unsecured creditors, “nearly all of whom have continued to do business” with the company.
“From the company’s perspective, the hope would be the bankruptcy case would be wrapped up shortly and they could go back to business as usual,” said William Wallo, the attorney for Mississippi Valley Broadcasters.
Creditors and other interested parties have 21 days to file a written objection with the bankruptcy court in Eau Claire.