A Tampa broadcaster is suing Orlando-based Florida Radio Network and two of its organizers, accusing them of diverting assets from Sun Radio Network in Tampa and then violating the terms of the contract to purchase the property.
Robert Persante, the attorney representing Charles and Dianne Harder of Tampa, said his clients sold a 60 percent interest in Sun Network for $250,000 in March to Rogers Kirven, a Florida Radio Network organizer and shareholder, and James McCotter, another organizer and one-time investor. McCotter and Kirven made a $100,000 payment to the Harders, but then disrupted Sun Network's business, refused to pay creditors, alienated clients and abandoned the station, the suit and Persante allege.
Sun Network is a radio-program syndicator and distributor with 100 affiliates nationwide. Its syndicated talk shows include For the People, a popular consumer-advocacy program that is hosted by Charles Harder.
Neither Kirven nor his attorney, Irving Gastfreund of Washington, would comment on the suit, though both confirmed that Kirven and McCotter had earlier this month rescinded their original purchase offer. McCotter was not available for comment.
Late last year, another Kirven-McCotter venture, Profit Group Inc., purchased the Florida Network from Susquehanna Broadcasting Co. of York, Pa. Florida Radio Network is similar to Sun, though it distributes sports programs, such as Miami Dolphins and University of Florida football games, and informational shows to 60 radio-station affiliates in Florida.
(Persante said last week that he would file an amendment to the current suit. He misidentified Florida Radio Network, calling it instead Florida Network and PPB Network Inc., both of which were names used by the former owner, Susquehanna.)
The lawsuit, filed late last month, stems from a business transaction that was plagued with problems from the start, Persante said. The Harders, who founded Sun Network last year, signed the agreement with McCotter and Kirven, assuming that the two men would acquire the network's debts as well as its assets, Persante said.
But that turned out not to be the case. The new owners did not pay debts that now exceed $173,000, according to the lawsuit. Among the outstanding bills is $60,000 owed United Stations Radio Networks Inc., which provides Sun Network with satellite time. As a result, Sun Network has been bumped from one satellite and has lost 40 of its affiliates, Persante said.
The suit alleges that McCotter and Kirven breached their fiduciary responsibilities as majority shareholders and directors, and diverted money and assets to Florida Network. No value is placed on the money and assets allegedly moved from Sun Network to Florida Network, though the lawsuit cites such things as satellite lines, confidential sales and customer information.
Those actions took place when Kirven was running the network, from March to about mid-May, Harder said. At that time, according to Harder and the lawsuit, Kirven put in place a number of his own employees. Harder, who is now running the network, has since laid off 14 employees to cut costs.
Some of Sun Network's current and former employees were in Orlando at Florida Radio Network offices last week, demanding a week's pay. Bill Glennon, a spokesman for the employee group, said the workers had been promised paychecks by Kirven, though they'd been put off for several days. Employees received their checks Friday afternoon, roughly a week later than they had expected, Glennon said.
The suit also alleges that the defendants mismanaged money mailed in by listeners of For The People. Persante said consumers thought they were purchasing memberships, books and pamphlets, though McCotter and Kirven did not fulfill their orders.
The suit asks that the defendants pay Sun Network's bills, pay the Harders the remaining $150,000 of their contract and stop using the Sun Network's funds.
The suit also asks the court to appoint a receiver to conduct the affairs of the network while the legal action is being resolved. Harder said that he had at least one other potential business partner in the wings if he can resolve the legal issues with McCotter and Kirven.
