Royce International owner Ed Stolz is again asking a federal appeals court to end the receivership that has seen his trio of FMs lined up for a potential sale. In a filing in the Ninth Circuit last week, Stolz alleges the receivership created by the district court “was never proper.” The reason given is that receiver Larry Patrick allegedly never posted the required bonds. But even if the receivership were aboveboard, Stolz says “maintaining it now constitutes a terrible injustice” because he has now paid the damages he owed to the music companies whose copyright lawsuit against him set into motion a years-long legal battle.
By heading to a federal appeals court, Stolz is attempting to stop what he has so far been unsuccessful at doing in district court – the pending $6 million sale of the former CHRs “92.7 The Revolution” KREV San Francisco, “104.3 Now” KFRH Las Vegas, and “Hot Hits 97.7” KRCK-FM Palm Springs, CA. Patrick has secured an offer from religious broadcaster VCY America to buy the stations.
But in his latest legal maneuver, Stolz tells the Ninth Circuit that the receivership should have been terminated nearly a year ago. He says he paid the $1.3 million owed to the music companies last November, then paid an additional $384,150 in February, followed by a $103,358 payment in May, which Stolz says satisfies all judgements against him.
But District Court Judge Jesus Bernal has so far rejected his attempts to dissolve the receivership, and with it the pending sale, saying the receivership itself was now owed money for operating the stations, along with several creditors. That list grew longer last week when C&E Haas Development Co. told the courts that Stolz had fallen behind on the payments related to its Las Vegas transmitter site. C&E Haas says it is now owed $220,473.
Yet Stolz contends the district court doesn’t have that authority to keep the receivership in control, and even if it did, he alleges the district court judge has “abused discretion” by doing so. “It appears to have irrationally ignored several significant considerations that would have tipped the balance in favor of dissolving the receivership and returning the radio stations to their rightful owners,” he said in the appeal.
In his motion, Stolz asks the Ninth Circuit to retroactively terminate the receiver to July 2020 – when Patrick was appointed – or to November 2020 – when Stolz paid the bulk of the damages. “Returning the operation of the FM radio stations to the owner as soon as possible is the best way to ensure that receiver will be paid,” he said. “It is irrational to think that paying off the Receiver becomes easier by disallowing the owner to operate the radio stations. The radio stations are where the money comes from.”
The ongoing fight has been a frustration for Bernal. He complained last month that the case was “nowhere near the end” because Stolz is continuing to play out every legal option available rather than pay the outstanding debts owed by his stations. He also urged VCY America to push the Federal Communications Commission to approve its acquisition of the FMs with an “enough is enough” message. In the meantime, VCY is airing its religious format on the FMs under a local marketing agreement.
Back in appeals court, there was yet another twist in the case. Right on the heels of filing the appeal with the Ninth Circuit, attorney Scott Sobel filed to withdraw from representing Stolz. That was quickly rejected by the court, however, since a corporation is not allowed to represent itself in the appeal.