Federal appeals court affirms plan to sell bankrupt Virginia radio station

Tuesday, April 11, 2000

A federal appeals court last week affirmed the original bankruptcy plan for the sale of an Abingdon, Va., radio station, casting doubt on the owners’ free-speech and petition battle to save their station.

For nearly three years, Craig and Rita Sutherland, the owners of WABN/92.7FM have fought the decision of a bankruptcy judge who approved the sale of their modern-rock station for $335,000 to Bristol Broadcasting Co. Although they came up with a payment plan, a U.S. district court judge refused to change the deal.

At one point last fall, the Sutherlands faced contempt charges and possible jail time for speaking out against efforts to transfer their station to a new owner.

On April 7, the 4th U.S. Circuit Court of Appeals agreed with the district court judge.

“We spoke briefly with our attorneys and have not fully discussed where things are to go from here,” Craig Sutherland said in a telephone interview. “It’s a little premature at this point. Frankly, I don’t know what the status is or what options we have.”

The Sutherlands’ effort to retain ownership of their station turned into a bitter free-speech and petition battle after U.S. District Judge Glen Williams told them on Sept. 27, 1999, to stop fighting the transfer. Specifically, Williams ordered the couple to refrain from broadcasting details about the ownership transfer and encouraging listeners to write to government officials.

Sutherland signed the transfer papers two days later, but his wife withdrew from their company, Legend Radio Group, to continue the fight.

On Sept. 30, Williams told Rita Sutherland that she must withdraw a petition she filed with the Federal Communications Commission that included signatures from more than 1,100 residents asking that the station remain with the Sutherlands.

The Sutherlands owe creditors about $425,000. They hope to repay the debt by securing an investor who would buy a $142,000 interest in the radio company and lend it $283,000 to pay off the remaining debt.

But the district court refused to approve such a plan. Williams said bankruptcy law prevents the original plan from being replaced save for a few modifications.

Officials from Bristol Broadcasting did not return calls for comment.

Phillip Taylor, a freelance contributor, works for the Daily Press in Newport News, Va.