Harry J. Pappas, founder and chairman of Pappas Telecasting Companies said this week that three of the more than 11 lenders of the Fortress loan group, which have financed a number of Pappas affiliates, have filed involuntary Chapter 7 bankruptcy petitions against him and his wife Stella.
The revelation came just days after the Reno-Nev.-based station group, which owns 30 TV stations nationwide, announced that pressure from a dozen lenders had driven 13 affiliates of Pappas Telecasting Co. into bankruptcy court. Some of its direct and indirect affiliates have filed for Chapter 11 protection in the United States Bankruptcy Court for the District of Delaware.
“This regrettable action became necessary when good faith efforts to resolve outstanding financing issues broke down between the Pappas Telecasting affiliates and their more than eleven separate mostly non-bank lenders,” the company said in a statement. It said station business operations would continue as normal and service to viewers would not be affected.
The tough credit market was a major element in the decision, the company said. It also operates 17 addtional television station and two radio stations that are not involved in the bankrupticies.
The stations which have filed for Chapter 11 protection are Fox affiliates KMPH (Fox) and KFRE (CW) in Fresno-Visalia, Calif.; KPTM (Fox) and KXVO (CW) in Omaha, Neb.; WCWG (CW) in Greensboro/Winston-Salem/Highpoint, N.C., KPTH (Fox) and KMEG (CBS) in Sioux City, Iowa; KTNC (TuVisión) in San Francisco/Oakland/San Jose; KAZH (TuVisión) in Houston; KDBC (CBS) in El Paso, Texas; KREN (CW) and KAZR (TuVisión) in Reno, Nev.; and KCWK (CW) in Yakima/Pasco-Richland/Kennewick, Wash.
The Chapter 11 filing allows time for a debt reorganization plan to be implemented.
Commenting on the Chapter 7 filings, Pappas said that “we are confident that the petition filed against us will be converted to a Chapter 11, or, as likely, be entirely dismissed by the court.”
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