A company spokesperson said the filing became necessary "when good faith efforts to resolve outstanding debt with a creditor from the company's early days broke down." The complete lineup of Air America programs will continue to air while it works with creditors in the reorganization training.
In court filings the company said the petition became necessary after Multicultural Radio Broadcasting "restrained" Air America's bank accounts, leaving it without available funds to operate. Air America said a second line of credit had been fully tapped.
MRB was an initial backer of Air America's programs, when Air America was run by Progress Media. But MRB dropped the network abruptly from its Los Angeles and Chicago stations in 2005 and sued for more than $1 million, accusing Progress Media of not paying required fees.
In today's filing, Piquant said though Air America has six of the top eight progressive talk programs, the company has never been profitable and has racked up $13.1 million in losses this year. Air America's best known personalities include Al Franken, Robert Kenney Jr., Randi Rhodes, Sam Seder and Mark Riley. After a September directive from its backers to start turning a profit or liquidate, it looked for additional investment, but also considered a sale or liquidation.
In a statement, Scott Elberg, the company's newly named CEO, said the bankruptcy would provide the relief necessary to continue operating.
'Nobody likes bankruptcy'
"Nobody likes filing for bankruptcy, however, this move will enable us to concentrate on informing and entertaining our audience during the coming months," he said. "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."
Piquant said its largest creditor is Real Networks President-CEO Rob Glaser, who was a former chairman of the Piquant board.