Radio Net Files for Bankruptcy

NEW YORK Air America Radio said Friday it had filed for Chapter 11 protection in U.S. Bankruptcy Court for the Southern District of New York. The network, which offers 19 hours of programming daily headlined by Al Franken, said the filing would allow the company to continue operations while it deals with its creditors.

Creditors include personalities such as Franken, Public Enemy’s Chuck D, managers such as former CEO Danny Goldberg, former president Gary Krantz, former programming vp Jon Sinton, several consultants, investors and ratings firm Arbitron. Total debt added up to more than $20 million on assets of about $4.3 million.

Over the past few weeks, word had circulated that Air America would be forced to seek bankruptcy. Air America denied such speculation. But now a creditor has seized the company’s assets, forcing the network to file, sources said.

Since it debuted two years ago, the left-leaning network has been plagued by financial difficulties and top management turnover, with Goldberg stepping down earlier this year. Despite the challenge of building a radio network without owning stations for distribution, the network managed to clear more than 90 affiliates and both satellite radio services.

In recent months, the company has been seeking additional financial investment.

“Nobody likes filing for bankruptcy. However, this move will enable us to concentrate on informing and entertaining our audience during the coming months,” said Scott Elberg, named as the new CEO by the company’s board. “Staying on the air is crucial for the network’s primary ratings period as well as for the country which is facing its most important mid-term election in recent history,” he added.