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Air America's Charity Scam Denials Don't Ring True

Yesterday we covered the story of Air America Radio receiving nearly half a million dollars in "loans" from a Bronx boy & girls club that Air America owners don't seem to remember anymore. Based on published reports from June, 2004 it appears that the current owners (and original investors) of the liberal talk network deliberately reorganized the company to avoid having the repay any and all liabilities - including those loans.

According to a June 19, 2004 article in the Chicago Tribune (locked in their pay archives - cached version here), the transfer of Air America Radio ownership to Piquant LLC was an inside job arranged by the co-founder of the network, multi-millionaire venture capitalist Sheldon Drobny.

The investors in Air America Radio, the liberal talk radio network that launched in March, are restructuring the company to free it of any obligations incurred by ousted chairman and founding investor Evan Cohen.

The investors, including Highland Park couple Sheldon and Anita Drobny and Air America Chief Executive Doug Kreeger, formed a new corporation, Piquant LLC. They plan to use the new entity to purchase the assets of Air America from Progress Media and RadioFree America, two related companies that own and operate the network.

"We have an asset purchase agreement we've entered into," said Norman Wain, another investor. "Progress Media and RadioFree America are selling all of their assets to Piquant."

...The purpose of the transaction is twofold: to eliminate Cohen and his partner Rex Sorensen's shares in the company, and to insulate the cash-strapped network from any debt or other obligation that Cohen may have incurred.

By his own admission Sheldon Drobny is the co-founder of Air America Radio (AAR), and the investors and owners of RadioFree America and Progress Media appear to be the same people who now own Piquant LLC (except for Cohen and Sorensen).

Remember this is what Drobny and Kreeger's company said about the matter yesterday:

"PIQUANT had no involvement whatsoever with funds from GLORIA WISE BOYS &GIRLS CLUB. PIQUANT neither received nor expended any of the sums that are the subject of the City's investigation of the CLUB.
While that may be technically true, RadioFree America and Progress Media were involved with the funds and the current individuals who make up Piquant LLC (according to the Chicago Tribune) were owners or investors in those companies. They designed an asset sale and shutdown of the two companies specifically to distance the network from the liabilities of RadioFree America and Progress Media, including loans from the Gloria Wise Boy's & Girls Club.

I'll leave it to securities investigators and lawyers to figure out what kind of legal trouble the Drobny's and Kreeger might be in (if any), but I would imagine the fact that they were significant players in all three companies will earn them careful scrutiny from New York DOI investigators, and possibly federal authorities.

Exactly how long will the mainstream media ignore this story? They love to eat their own - what are they waiting for?

Previous Coverage

Air America Steals Half Million Dollars From Bronx Kids Charity
Other Coverage
Michelle Malkin
Captain Ed
Ace of Spades HQ
Macho Nachos
Update: As noted in the comments, law professor Stephen Bainbridge looked at this transaction last year. His assessment is worth reading.

Update: Air America now claims they agreed to repay the loan (which they previously failed to even acknowledge) in this statement (partially quoted below).

As reported in the Wall Street Journal and the HBO Documentary, Left of the Dial‚ the company that the Gloria Wise Boys & Girls Club officials gave money to, Progress Media, has been defunct since May 2004. That company was run at the time by Evan Cohen who has not had any involvement in Air America Radio since May 2004.

The current owners of Air America Radio have no obligation to Progress Media's business activities. We are very disturbed that Air America Radio's good name could be associated with a reduction in services for young people, which is why we agreed months ago to fully compensate the Gloria Wise Boys & Girls Club as a result of this transaction.

According to the Chicago Tribune report the current owners of Air America were the ones who closed Progress Media, so they most certainly had a moral obligation (and perhaps a legal obligation) to repay the Gloria Wise Boys & Girls Club. While I doubt that their agreement to "fully compensate" Gloria Wise occurred "months ago," the fact that they did agree to repay the loans are a testament to the publicity blogs were able to bring to this story.


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Comments (17)

Imagine what Franken and Ga... (Below threshold)
joe:

Imagine what Franken and Garofalo would be saying if Clear Channel were the accused party here.

Stop, just stop with this c... (Below threshold)
JmaR:

Stop, just stop with this crap, Kevin you're embarassing yourself with this tabloid garbage.

That's just about the funni... (Below threshold)
bullwinkle:

That's just about the funniest thing I've read all week. Did Johnny Carson help you with the timing JmaR?

Tabloid garbage?$5... (Below threshold)
mesablue:

Tabloid garbage?

$500,000.00 that can no longer go towards helping out the children it was intended for in a goverment funded program because of greed and stupidity is a serious matter.

Afraid you are not going to be able to tune into your favorite liberal looney tunes shows for much longer JmaR?

Scumbags.

JmaR:Care to share... (Below threshold)
joe:

JmaR:

Care to share any facts to support your statement?

Exactly how long will th... (Below threshold)
craig:

Exactly how long will the mainstream media ignore this story? They love to eat their own - what are they waiting for?

Eh? Since when do they eat their own? They go through a lot to PROTECT their own. They're being completely consistent in burying this story.

Stephen Bainbridge blogged ... (Below threshold)
AnonymousDrivel:

Stephen Bainbridge blogged on this over a year ago and questioned some of the same actions. An interesting read:

Air America: The Corporate Law Aspects
June 21, 2004

He seems to be ahead of this curve.

In case anyone isn't aware,... (Below threshold)
ANonymous:

In case anyone isn't aware, it would be illegal for a company to sell its assets, distribute the proceeds of the sale to its owners, and then claim that it doesn't have the money to pay its debts. It's called fraudulent conveyance. I don't know if that's what they were trying to do, but in any case they won't be able to repudiate debts incurred by the former owners of the company.

I tried that once. The poli... (Below threshold)
Eneils Bailey:

I tried that once. The police came to serve a warrant on me. Told them I had changed my name, so it was not valid warrant. It didn't work. Karl Rove made me do it.

Wait a minute: aren't these... (Below threshold)

Wait a minute: aren't these guys laundering their company's ownership to avoid paying a recent debt the same guys who advocate having people who never owned slaves who bought companies that never owned slaves paying "damages" to people who were never slaves?

Consistency is the hobgoblin of partisans of all stripes. Somehow it seems to bite the Left more often, though.

Post update #2,Wai... (Below threshold)
mesablue:

Post update #2,

Waiting with baited breath...

Is Al F. going to give up another paycheck so they can meet their obligation.

No es mucho.

Bainbridge covered all of t... (Below threshold)

Bainbridge covered all of the angles with his characteristic perfection.

HEY NOW! Let's all be symp... (Below threshold)
moseby:

HEY NOW! Let's all be sympathetic to poor al franken. A stronger prescription for a set of Hubble Telescope-like eyeglasses aren't cheap. Not to mention the cost of upper cheek skin grafts from going outside in the sun with those damn things on.

joe? Garofalo couldn't say ... (Below threshold)

joe? Garofalo couldn't say diddly if Clear Channel was involved, since roughly half the stations carrying Air Idiot belong to Clear Channel.

One important question bein... (Below threshold)

One important question being overlooked here is what assets were collaterized to secure this loan. If it was Air America assets or Progress Media stock, the transfer to Piquant could not take place until the debt had been satisfied or the loan recollateralized and/or reconveyed.

Someone is holding that note right now. It can't be Progress Media, all parties claim it is "defunct" which I assume to mean the corporation has been dissolved. It can't be Piquant, they claim they have nothing to do with it. It might be Cohen, but what illegal actions were taken by the principals and Board of Directors of all three entities involved to remove it from the plate prior to the asset transfer to Piquant?

Enquiring minds and all.

Bob Johnson
Executive Producer
Rightalk.com

-Another bite of the apple.... (Below threshold)

-Another bite of the apple....

"If a liberal does it, they call it "creative bookkeeping...If a conservative does it they call it embezelment"...

- and the beat goes on.....

I love the way you guys jus... (Below threshold)
Jo-Ann M.:

I love the way you guys just link from one blog to another for your 'sources.'
Air America is not being investigated.
Gloria Wise is, and Evan Cohen should be. He's a crook who practiced very shady business practices.
Daily Kos tracked this story back to it's original source, which turns out to be an article by someone named Michael Horowitz in a publication called the Bronx News, which is published by a company that puts out those little advertising and real estate circulars, you pick up around your neighborhood.
Mr Horowitz quotes two anonymous sources in his article. Ironic, isn't it, considering how the right is always criticizing the 'liberal' media for it's use of anonymous sourcing.




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