Investor Can Reclaim Video Gear Equipment Loaned To Bankrupt Station

A California investor can claim much of the broadcast equipment at Channel 58 after a federal judge ruled Wednesday that the bankrupt station never would pay him back.

Bankruptcy Judge Alfred Hagan ruled that the station’s largest shareholder, Keith Wester of Southern California, can reclaim the playback machines and editing decks at Channel 58.

Wester loaned the equipment to the station when it began broadcasting family and religious programming in Kootenai County in May 1994. Under the deal, if Wester did not receive the loan amount plus 10 percent interest by July 1, 1995, he was entitled to get the equipment back. He has received nothing.

The station’s founder, David Derryberry, rounded up investors for the venture, Wester being one of them. In the fall of 1994, a group of those investors - excluding Wester - negotiated a deal to buy the station and remove Derryberry as general partner.

The deal went sour. Derryberry, who had returned to California by late 1994, claimed the investors forged his name on documents to steal the Federal Communications Commission license from him. The FCC must approve any station license transfer.

The investors, doing business as Idaho Broadcast Network, claimed Derryberry reneged on the deal, and also spent hundreds of thousands of dollars on programming that the station couldn’t afford. A week after forming, the Idaho Broadcast Network filed bankruptcy.

That was 18 months ago. Wester, who works on films in Hollywood, has paid more than $80,000 on loans for the equipment, said Louis Garbrecht, Wester’s attorney.

“Clearly, the bankruptcy is going nowhere,” Garbrecht explained to Judge Hagan on Wednesday. “We are entitled to relief here.”

Hagan gave Wester’s representative, Mike Parkhurst, the OK to claim the equipment at the station on Howard Street in Coeur d’Alene. Parkhurst, who served as station manager until April of this year, said he would try to negotiate a deal with current general manager Bob Rosier to take control of the equipment and keep the station running.

Rosier said Wednesday that Parkhurst has conspired to prevent the station from succeeding. Rosier said he’s lost between $200,000 and $300,000 of his own money to keep the station going.

Rosier’s satellite television business, Astrovision, is the station’s only advertiser. Rosier justifies the free advertising Astrovision receives as a trade-out for paying the station’s expenses.

“Parkhurst is trying to poison things up here,” he said. “I just want to shoot him.”

The station still can operate without Wester’s equipment, as long as it keeps the transmitter, Rosier said.

Wester wants to keep the station broadcasting, Parkhurst said, in part because it provides Seattle Mariner baseball telecasts for North Idaho.

If the station stops broadcasting, Wester, under an agreement filed before the bankruptcy, can reclaim the transmitter.

Judge Hagan stopped Parkhurst from getting at the transmitter because Wester traded its value for shares that still are tied to the bankruptcy. Channel 58’s shares - once sold for $2,500 each - now are worthless, all parties agree.

Ford Elsaesser, Idaho Broadcast Network attorney, said the case will be refiled under Chapter 7 bankruptcy, where assets are auctioned off to pay creditors. Attempts to sell the debt-ridden station have failed.

The issue of the FCC license likely will be fought in court, Elsaesser said.

The bankruptcy case has dragged on in part because Hagan wanted the license issue cleared before a reorganization plan could go forward.

Derryberry, and not Idaho Broadcast Network, is the license holder, according to FCC records. Unlicensed operation of a television station is punishable by fines and jail time, according to FCC law.

But the FCC won’t interfere with bankrupt television stations - especially low power ones in remote areas like Idaho - for fear of tying up thinly spread legal resources, said J. Richard Carr, a Maryland attorney who deals with the agency.

Rosier believes the station can make money, if Parkhurst, Wester and Derryberry kept their hands out of it.

“I’ve always loved the idea of Channel 58 and I still believe in it,” said Rosier. “If it weren’t for my business, this station would have been shut down six months ago.”

, DataTimes MEMO: Cut in Spokane edition