Stolz stations

A three-judge panel of the U.S. Court of Appeals in Riverside, CA has unanimously rejected an emergency motion filed by station owner Ed Stolz to have Larry Patrick dismissed as the receiver overseeing Stolz’s stations and dissolve the receivership that has been in control of a trio of Royce International FMs since last July. The court also rejected Stolz’s request that the sale of his three FMs be blocked. At the same time, the judges also rejected Patrick’s request that the appeal be dismissed.

Judge Daniel Bress said in a brief ruling that Stolz has not offered sufficient evidence for why the pending $6 million 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 to religious broadcaster VCY America should be brought to a halt. But Bress did leave the door open, saying if Stolz can provide evidence that he has complied with lower court orders to pay damages owed to a group of music companies, it may be enough to avoid the need to sell the FMs.

The Ninth Circuit decision, while delivering defeats for both sides, could still be seen as a glimmer of hope for Stolz who has been fighting to hold onto the stations he has owned for decades and for which he has spent a night in jail. District Court Judge Jesus Bernal ordered Stolz jailed in February after Bernal ruled that he failed to comply with his earlier order to turn over documents, keys and other materials to Patrick.

In recent weeks Stolz has been trying to convince the judge that the $1.7 million he deposited with the court is enough to cover the $1.3 million in damages his stations owe a group of record labels, music publishers and other rights holders which brought a copyright infringement case against the FMs. Bernal has scheduled a hearing for May 10 in Los Angeles on the request.

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.

With the appeal process still alive, and the Ninth Circuit giving Stolz permission to file an oversized motion with them, it once again casts doubt on how soon VCY America will be able to close its deal. The broadcaster has signed a $5,000-per month local marketing agreement with Patrick to operate the stations. 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. But has not yet said when a format change from CHR to religious programming could take place.

The Federal Communications Commission also needs to grant approval of any sale. There too, Stolz has been submitting additional documents in recent days trying to convince the FCC to reject Patricks’ effort to secure approval. In a filing last week, Stolz accused Patrick of using a “campaign of misinformation and misdeeds directed towards the FCC” and that he believes the courts will ultimately rule he has satisfied the judgement against him negating the need to sell the stations.