Air America Radio, the liberal talk and news radio network that features the comedian Al Franken, filed for Chapter 11 bankruptcy protection on Friday, but will stay on the air while it reorganizes with funding from its investor group.
The network had denied rumors just a month ago that it would file for bankruptcy protection. On Friday, Air America spokeswoman Jaime Horn told the AP that the filing became necessary only recently after negotiations with a creditor from the privately held company’s early days broke down.
Horn declined to name the creditor, but the company had tussled earlier with a business partner, MultiCultural Radio Broadcasting Inc., which is also a creditor to Air America’s parent company, Piquant LLC.
The network will operate in the interim with funding from Democracy Allies LLC, its investor group, which includes RealNetworks Inc. CEO Robert Glaser.
Glaser had formerly served as chairman of Air America and owns 36.7 percent of the company. He is also owed $9.8 million, according to documents filed Friday with U.S. Bankruptcy Court for the Southern District of New York.
Glaser resigned as a director of Piquant effective Friday morning, Tracy Klestadt of Klestadt & Winters LLP, an attorney for Piquant, said.
In addition to Franken, the network also features shows from liberal talk show host Randi Rhodes and syndicates shows from Jerry Springer and Portland, Ore.-based talk show host Thom Hartmann.
Air America owes Franken $360,750, according to the court documents. Franken was traveling and unavailable to comment on the filing on Friday but would do so Monday, Horn said.
Air America also said Friday it had named Scott Elberg as its new CEO. Elberg, who had worked at WKTU and also was a former general manager of the radio station WLIB in New York, has been with the network since May 2005.
The filing and executive shuffle marked the latest turbulence at the liberal talk radio network, which went on the air two years ago. This April, Danny Goldberg stepped down as CEO and was replaced by an interim chief executive from a management consulting firm.
“Nobody likes filing for bankruptcy,” Elberg said in a statement. “However, this move will enable us to concentrate on informing and entertaining our audience during the coming months.”
Air America has struggled financially since its inception. Documents filed with the bankruptcy court show that the company lost $9.1 million in 2004, $19.6 million in 2005 and $13.1 million so far in 2006.
Air America also disclosed in the court documents that two directors departed in the last two months, Douglas Kreeger and Tom Embrescia. Gary Krantz also departed as president in June, and executive vice president Tom Athans and chief operating officer Carl Ginsburg left in July.