The coalition of record labels, music publishers and other rights holders that won a $1.3 million copyright infringement suit against Royce International Broadcasting say it has been three years since their victory and they have not seen a penny. They are asking a federal judge to release the $1.7 million that Royce owner Ed Stolz has deposited with the court to cover not only their judgement but several years’ worth of legal fees that have been amassed as Royce has repeatedly taken legal maneuvers to avoid paying them or see his three FMs sold to cover the outstanding damages.
The group, including Sony/ATV, Universal Music, and Warner Music Group, accuse Stolz of using “underhanded tactics” and “obstructionist conduct” to block the sale of CHRs “92.7 The Revolution” KREV San Francisco, “104.3 Now” KFRH Las Vegas, and “Hot Hits 97.7” KRCK-FM Palm Springs, CA and prevent payment to the music companies and other creditors. They say Stolz has deposited $1.7 million with the court to avoid being sent to jail. But he has still refused the unconditional release of the funds. The music companies say Stolz is acting as if it were a “negotiation” despite the Ninth Circuit Court of Appeals decision ordering him to pay.
District Court Judge Jesus Bernal has scheduled a hearing for May 10 in Los Angeles on the request, which includes $107,523 in attorneys’ fees that the companies say they are “rightfully due” as they attempt to collect their lawsuit’s judgement.
The companies alleged the Stolz-owned stations had played music in their catalogs without obtaining the required licenses. Bernal earlier awarded the music companies damages for each of the eleven copyright violations named in their complaint, some dating back to 1981. Stolz appealed the judgement, but the Ninth Circuit Court of Appeals upheld the verdict.
Now the fight over whether to release the money comes as Stolz and the music companies again wait to hear from the Ninth Circuit. Stolz has filed an appeal with the appellate court asking it to overturn the district court decision not to dismiss the receivership put into place to manage and sell the three FMs. The receiver, broker Larry Patrick, has lined up a $6 million deal to sell the stations to religious broadcaster VCY America.
The appeal may stall the sale’s finalization, but VCY America could soon replace the CHR programming on the three FMs with its religious teaching format. The broadcaster has signed a $5,000-per month local marketing agreement with Patrick to operate the stations. It has not yet said when a format change could take place, but VCY America has told the court it has spent $80,000 to buy the equipment needed to bring the stations into compliance with their licenses. It has also retained contract engineers in San Francisco, Las Vegas, and Palm Springs to begin formulating a remediation plan.
Meanwhile in Washington, Patrick and VCY America on Friday again asked the Federal Communications Commission to reject an attempt by Stolz to block the proposed sale. They alleged that Stolz made “false claims” about Patrick and VCY to delay the FCC’s approval of the sale. They also request the FCC “take such further action as may be just and proper” against Stolz for the delay tactic.
If the sale of the three FMs goes through, it would leave Stolz with “790 Talk Now” KBET in Las Vegas and two FM translators in the Palm Springs, CA market.