BizRadio forced into involuntary bankruptcy? – The empire that Dan Frishberg built is collapsing!

Every choice has a consequence.  From some time now I’ve been reporting on BizRadio – a series that has taken twists and turns that I did not expect at the beginning.  The only thing that made sense – and still does today – is that the choices that Dan Frishberg, Elisea Frishberg, and Albert Kaleta made have taken a dramatic negative turn – and I might say much to the detriment of many investors, Ron Crider and Rehan Siddiqi.

Now come Florence Reiley, Kevin Deering and Stephen Cook requesting the US Bankruptcy Court in the Southern District of Texas to force BizRadio into a Chapter 7 bankruptcy.

The filing can be found here.  Likewise, a recent Houston Chronicle article on the same topic can be see here.

According to the Houston Chronicle article:

Meanwhile, BizRadio CEO Daniel Frishberg is battling with the receiver appointed in the SEC case. The SEC sued BizRadio co-founder Albert Kaleta and his investment firm, Kaleta Capital Management, claiming they mislead investors about the sale of $10 million in promissory notes. The receiver was appointed to recover money from investors, primarily from BizRadio and Frishberg’s own investment firm.

Even as he was squaring off with the receiver, Frishberg sold BizRadio’s Houston station, KTEK 1110 AM, to Salem Communications for $3.7 million, which includes the cancellation of a $1.26 million loan. BizRadio bought the station from Salem for $7.6 million just two years ago.

Now I’m not an attorney, but it doesn’t take a legal scholar to know that there are a long list of people who legitimately would lay claim to any monies that Frishberg receives from the sale (purported sale – I still don’t have that figured out completely) of BizRadio and/or it’s assets.

Let’s see…there are:

• The investors who thus far have lost their money with no true prospect for recovery;
• The SEC Receiver who is trying to attach assets;
• Rehan Siddiqi who was duped for $180,000 and the BizRadio ship was sinking;
• Salem Communications (who as best I can tell) was still owed for the purchase of the station from Frishberg (which is why I can’t piece together the pieces of how they would pay him for what it appears he owes them for)
• Employees who, by the droves, have been let go – many of whom say they are owed back wages; and
• (this is a guess), but knowing what happens when a business fails, I would guess that BizRadio owes back payroll taxes – as typically since they are due after the fact, they are the last thing to be paid.  (Keep in mind, this is speculation and not founded on credible inside information).

I am assuming that the folks who filed for BizRadio to go into bankruptcy were doing so in an effort to position themselves to gain bankruptcy assets.  Not a bad move.

ON ANOTHER NOTE…I’ve conducted several interviews that soon will become part of this series – so stay tuned.  Of course…YOUR COMMENTS ARE WELCOME!