The Pacifica Foundation is seeking a loan to avoid bankruptcy and seizure of its assets.
The foundation is close to acquiring a $2 million loan from supporters of KPFK in Los Angeles, according to Bill Crosier, interim executive director of the Pacific Foundation, and board member Grace Aaron.
Pacifica is at risk of asset seizure following a judgment in October that ordered the network to pay $1.8 million in back rent plus interest to the Empire State Realty Trust. The rent is for the transmitter of WBAI, Pacifica’s New York City station.
The Pacifica board met in a closed session Thursday to discuss preparing loan documents but did not vote to approve the loan, according to Aaron. Pacifica’s board approved initial terms for the loan Jan. 2, as well as a second loan to pay back that loan, any balance still owed ESRT and other debts.
Pacifica’s total debt is roughly $8 million, including roughly $2.4 million to Democracy Now! Productions. The network is also in arrears for pension payments.
If the foundation can’t finalize a loan to pay the full amount owed to ESRT, it would seek to pay what it can and to enter a forbearance agreement with ESRT to allow more time to secure financing. ESRT has filed paperwork in the states where Pacifica operates to enable asset seizure, according to Crosier.
The foundation has sought to minimize damage that could result from seizure of its bank accounts by covering payroll and all expenses possible in advance, Aaron said.
Crosier said he’s “feeling better” than he did after the October ruling against Pacifica because the loan would block ESRT from seizing assets. But he’s still “real concerned,” he said: “Longer-term, we still have to have a plan to pay off the loan.”
The network is continuing to explore the possibility of a frequency swap to raise funds. Under such a plan, Pacifica would accept a sum to trade a station’s signal for a weaker frequency in the same market. Such an approach is the most likely route to pay off the debts, according to Crosier.
Pacifica’s board engaged a broker last year to look into that option. Board members initially considered a frequency swap for WBAI due to the ESRT debt. “But we have other debt that’s for all of Pacifica … so the board did open up the search to all stations,” Crosier said.
“There were a few offers,” Crosier said, but “the board was reluctant to go with any of them.” Now, he says, there is “some support” among board members. “I think there’s recognition we have to come up with some plan to pay off the debt, but there hasn’t been agreement on what it will be yet,” he said.
A frequency swap “should be considered,” Aaron said. But winning approval for a swap would be difficult because Pacifica’s bylaws require a majority vote by the donors to Pacifica and its five stations, as well as volunteers. Members would be more open to a swap that brings in a larger amount of money while causing minimal loss of service to listeners, she said.
Crosier had previously sought for the foundation to file for Chapter 11 bankruptcy to settle the judgment, but the board did not vote on a motion, he said.
Aaron said she opposed declaring bankruptcy due to costs and because Pacifica would need to pay all debts “in a relatively short amount of time,” rather than just its debt to ESRT.
As the foundation looks for more time to settle debts, it’s also shuffling leadership. The board voted earlier this month to replace Crosier with a new interim executive director, expected to be announced later this month. He has served as interim director since February 2017.
Correction: An earlier version of this article reported that Pacifica is in debt to Democracy Now! host Amy Goodman for roughly $2.5 million. Pacifica is in debt to Democracy Now! Productions for roughly $2.4 million.