A message from 2 of Roy's supporters, Jerry Manpearl and Jan Goodman:
Dear Amy, Friend of Roy Tuckman and the Pacifica Foundation Radio Network,
I regret to tell you that Pacifica is in grave danger. The Empire State Building (ESB), the landlord of Pacifica's New York station WBAI, has obtained a $2 million judgment against the Pacifica Foundation (which threatens all 5 stations). The ESB is now in the process of collecting, and may force Pacifica to file bankruptcy to stop collection efforts. Bankruptcy is extremely dangerous. Pacifica may well be broken up with several stations sold off.
Fortunately, Pacifica has tremendous assets, including real estate worth over $10 million and radio signals which may be worth way over $100 million. These cannot be accessed immediately, or quickly enough to prevent collection and bankruptcy.
Therefore, the Pacifica National Board of Directors is in the process of borrowing $ 3.5 million from a foundation secured by the various Pacifica buildings, including the KPFK building in Studio City, which has an appraised value of about $4.5 million. However that loan will not fund soon enough to prevent disaster.
Thus, we are trying to put together a short-term "bridge" loan of $2,000,000 to pay off the Empire State Building, secured by the KPFK building. The $ 3.5 million loan from a foundation will then pay off our short-term bridge loan. The security trust deed on the KPFK property will be released when the bridge loan is paid off.
Now the hard question. I, Jan and other KPFK / Pacifica supporters have committed to put up at least $1,000,000. We need some additional Pacifica supporters that will lend $50,000-$300,000 each. Given the short time frame, handling offers of less than $50,000 would be too unwieldy.
The terms of the loan would be approximately:
1. 6 months at 8.5% interest, then an extension of 6 months at 9.5% interest.
2. The 1st 6 months of interest is deferred & will be due at 12 months. During the 2nd 6 months, interest-only payments will be due monthly. All principal & interest due in 12 months or whenever the larger loan is funded, whichever occurs first.
3. 1.75% origination fee will be payable at the end of the loan. This fee would pay for an outside lawyer to create a legal entity to hold funds. The legal entity would probably be a trust or LLC. The outside lawyer would not be Jerry Manpearl or Jan Goodman.
4. No prepayment penalty.
5. Late payment charge of 10% (during the 2nd 6 months).
6. Loan secured by KPFK building in Studio City, appraised at $4.5 million. It is free and clear.
Risk: the $ 3.5 million foundation loan does not materialize, Pacifica Foundation has to file bankruptcy, and the lenders do not get paid immediately, but will be well secured by a 1st Trust Deed. As bankruptcy proceedings can last up to 2 years, this has to be money that you will not need to use for up to 3 years.
Please consider participating.
Post script by King Reilly:
As you may know, Jan and Jerry are retired lawyers who do a lot of pro bono work for Pacifica. Jan is on the KPFK Local Station Board and Pacifica National Board. Jerry has considerable experience with real estate transactions. He says that a loan secured by a 1st Trust Deed guarantees that the lender would receive at the conclusion of any bankruptcy:
- the loan principal
- the full loan interest earned both before and during bankruptcy
- any reasonable attorneys' fees. You would not have to get your own attorney. Jan & Jerry would obtain a bankruptcy attorney for our group of lenders.
- certain other costs incurred by you, as the lender, during bankruptcy
There is an imminent danger of Pacifica's bank accounts being seized by the Empire State Building and subsequent Pacifica bankruptcy.
We would like to wrap this up and present our proposal to the Pacifica National Board this coming Tuesday, January 2nd or possibly Thursday, January 4th.
I am asking any interested friends of Pacifica to contact Jerry or me on Monday, January 1st or by Wednesday, January 3rd, at the latest.
Warm regards during this holiday season,King Reilly, Pacifica supporter, 323-839-0985 [log in to unmask]