Sheridan Broadcasting Network, a subsidiary of Sheridan Broadcasting Corporation, has filed for Chapter 11 bankruptcy protection in order to reorganize the company’s obligations so it can continue its effort to buy out its American Urban Radio Network (AURN) partner, National Black Network (NBN).
Ron Davenport Jr., special counsel and president of SBC’s radio division, said the filing does not affect AURN or SBC. It only involves an ongoing issue between SBN and NBN, which the filing can help resolve.
“This is a strategic bankruptcy filing to reorganize the company and protect it from a greedy, overzealous hedge fund that took over one Black-owned company and is trying to do the same with us,” he said.
In 1991, SBN and NBN formed AURN, with SBN holding 51 percent of the new company. Starting in 2004, NBN’s parent company, Access One borrowed $94 million from the hedge fund Guggenheim Capital. They couldn’t pay it back.
“By 2005, they were in technical default, and in 2011 we got an email from Access One saying its lenders effectively controlled the company,” said Davenport. “By this time NBN had no operations and no employees. It was just a checking account.”
In 2012 Access One sued SBN, saying it was fiduciary irresponsibility because it did have operations.
“They said we were looting the company by maintaining things like production services, news services, employees—all of which they said were superfluous,” said Davenport.
Sheridan, Davenport said, had earlier tried to buy out NBN but the hedge fund countered by demanding the entire AURN be sold. Lawsuits and counter lawsuits were filed, and ultimately Davenport said, they settled, and agreed to pay Guggenheim in three installments for NBN’s 49 percent stake in AURN.
“We missed the last payment. We asked for more time and were denied. So, here we are,” he said. “We’re not upset, we inherited this. We had no dealings with (Guggenheim) all result of NBN and Access One.”
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