Creditors are looking to put Inner City Broadcasting into bankruptcy for their over $200 million in debt owed.
The parent company of many cities’ first Black-owned radio stations could be bought out by creditors seeking to put it in bankruptcy.
On Saturday, a lawsuit was filed by creditors in the U.S. Bankruptcy Court in Manhattan against Inner City Broadcasting Corp. currently being run by Pierre Sutton and which was founded by Sutton’s father and civil rights leader Percy Sutton.
Creditors including billionaire Ron Burkle’s Yucaipa Corporate Initiatives Fund II LP, Drawbridge Special Opportunities Fund Ltd and Fortress Credit Funding I LP say that the broadcasting corporation owes them $254 million and that the corporation pulled out of a deal to restructure its debt.
The parties say that Sutton rejected the pre-packed bankruptcy deal that would have paid the creditors in full. Through the plan, shareholders would have received a majority of the equity in the company including $2.2 million in cash and a two percent stake in the corporation.
They allege that Sutton rejected the deal to gain more money for himself. In the proposed plan he would have received a five-year employment agreement and an annual salary of $600,000.
Sutton's father died in 2009. As the longest-serving president of New York’s Manhattan borough, Percy Sutton started his career as a civil rights lawyer representing recognizable names such Malcom X. He then formed New York’s first Black-owned radio station, WLIB, along with 18 other “urban” radio stations and the Apollo Theatre.
A lawyer for Inner City Media has not commented on the filing.
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