Investigative Report Breakdown

I've had just a little time to digest some of the massive amounts of information that Michelle and Brian provided yesterday, and I have a few preliminary thoughts. Ideally, I would have several quiet hours to pore over this and formulate something more thorough, but I don't have that kind of time luxury over the next several days, so I will do what I can in brief.

First, the Diamond court order. Now, this order has to do with the payment of legal fees for having essentially lost a lawsuit. Despite the fact that the two parties in the dispute reached a settlement, the judge clearly believed that Air America was on the losing end of that settlement, and accordingly ordered Air America to fork up the legal fees - and additionally gave tehm a scalding for failing to live up to the terms of the settlement agreement. The total that they were ordered to pay, apparently, was $255,518. I haven't had time yet to determine how much of that is settlement money, and how much is attorney's fees.

Next, to the complaint by Multicultural Radio. There are several things about this complaint that I frankly don't understand. If the original judgment was entered June 23, 2004 - in other words, AFTER the transfer of Air America to Piquant LLC, why is Multicultural accusing Piquant of fraudulent conveyance of assets? Further, if they are especially concerned (point 1 of their complaint) with the $255,000 and change that was owed to them as of the November 2004 court order, it makes even less sense to accuse Piquant of fraudulent conveyance of assets to avoid this judgment, given that the assets in question (Air America) were transferred from Progress Media to Piquant LLC in May of 2004 (as I recall. It could have been June).

Now, this is the first company that I'm aware of to flat out accuse Piquant LLC of fraudulent conveyance, which is something that we've speculated might be possible before. But to me, the dates just don't seem to add up at this point.

The second thing that strikes me as a little off about this complaint is that they spend about 1/4 of their time accusing Piquant LLC of fraudulently conveying assets to avoid debt, and then the rest of their time establishing the fact that Piquant has absolutely no money to pay them with anyway. If you're seeking to establish the fact that a company is shifting their assets around to avoid paying you, it seems, to me, to be a little counterproductive to spend most of your time arguing in your complaint that they have no assets at all. But that's just me.

More later as I have a chance to chew over this thoroughly.

Comments

[Bruce Hayden]

My guess is that they are trying to pierce the corporate veil and get at the assets of the stockholders.

[docdave]

These are my guesses. 1) Air America is essentially insolvent 2) Air America is desperately trying to hang on because if they fold, liberals and leftist will have to cope with the fact that they are not very popular, especially as compared to conservative radio.

[Blue Neponset]

docdave,

You guys on the right need to make up your minds.

I thought the main stream media was liberal. What does the circulation of the NYT and the ratings of CNN, CBS News, etc. say about the popularity of liberal media?

Which is it? Are liberals over represented in the media or are their ideas so unpopular that they don't have a voice?

[Jim Treacher]

"What does the circulation of the NYT and the ratings of CNN, CBS News, etc. say about the popularity of liberal media?"

Quite a bit, considering they're both dropping like rocks.

[TomT]

You have to understand that Air America Radio (AAR) is not a company as such. It is a collection of contracts and agreements owned formerly by Progress Media, a corporation. Progress Media failed to pay its bills to Multicultural Radio, which sued and then settled with Progress Media. However, while the suit was in progress, Progress Media sold its assets, including AAR, to a new corporation, Piquant LLC (limited liability corp). Piquant's position is that the debts owed to Gloria Wise and Multicultural are owed by Progress Media, not Piquant, and technically that is correct. Although Progress Media is still an active corporation, it has no money to pay its bills, and no assets for creditors to seize.

There are some circumstances in which it might be legal to absolve Piquant of Progress Media's misdeeds. However, the allegations set forth in the full complaint, if true, demonstrate that the transfer of Progess Media's assets to Piquant was done for the sole purpose of avoiding these debts.

Let me try to make an easy analogy. Suppose I form "Joe Construction" for the purpose of building homes, and I buy $100,000 worth of supplies on credit. My wife forms "Mary Construction" and uses those supplies to build a house, which she sells for $200,000. The supplier wants to get paid, but I claim poverty. Sorry, I don't have the supplies any more--sue me if you want, but I don't have any money either. What about the $200,000, the supplier says? Well, that's Mary's business, not mine.

A judge can rule that the transaction was fraudulent--as it was--and make Mary pay for the supplies. Likewise, Multicultural is asking the court to rule that the transfer of Progress Media's only significant asset (AAR) to Piquant, leaving Progress broke and unable to repay its creditors, was fraudulent, and force Piquant, the beneficiary of the fraud, to repay the money.