Suit: Air America Ownership Transfer a 'Sham'

A lawsuit filed by an owner of radio stations claims that the transfer of ownership of the Air America radio network from Progress Media to Piquant LLC in May 2004 was a "sham" intended to maintain the network's assets while deceiving its creditors, according to documents posted on a blog yesterday.

In the suit, which was filed in state Supreme Court at Manhattan in May, Multicultural Radio Broadcasting, a radio station owner with affiliates across the country, is seeking more than $255,000 it claims it is owed by the current owners of Air America, Piquant LLC. Multicultural's complaint, as posted on the blog of Michelle Malkin, a conservative commentator, states that the station owner is trying to enforce a judgment in its favor last November, in which the court ordered Air America's owners to pay it that amount.

A representative of Air America, contacted by The New York Sun last night, would not comment on the allegations.

The city's Department of Investigation, in conjunction with the state attorney general's office, is probing the Gloria Wise Boys & Girls Club in the Bronx for allegations of "inappropriate transactions" that include $875,000 that Gloria Wise transferred to Air America and the owner of Progress Media, Evan Cohen. In distancing itself from the Gloria Wise transfers, Piquant LLC has said that Progress Media was the entity to which loans were made, and that Progress Media has been defunct since May 2004. Piquant has nonetheless agreed to repay all the money.

"The current owners of Air America Radio have no obligation to Progress Media's business activities," Piquant said in an earlier statement.

Air America's top star, Al Franken, has said the loans were the work of the network's former director, Mr. Cohen, who simultaneously served as Gloria Wise's director of development. Piquant has said Mr. Cohen has not had any affiliation with the network since May 2004.

In portions of court papers posted on Ms. Malkin's blog, Multicultural calls the transfer of assets from Progress Media to Piquant LLC a "sham." The complaint says the transfer of ownership from Progress Media to Piquant LLC was a "transparent" scheme to avoid outstanding debts to creditors. In the transaction, the plaintiffs argue, nearly all of the assets were transferred, with few of the liabilities. In its complaint, Multicultural cites the transfers from Gloria Wise to Air America and says they were the radio network's "desperate" attempts to raise cash.

The complaint names Mr. Cohen and several current managers of Air America. It says the transfers between Gloria Wise and the liberal radio network and Mr. Cohen took place between October 3, 2003, and March 15, 2004. The probe by the Department of Investigation began in January 2004.

The more than $255,000 that Multicultural says it is owed stems from a period two weeks after Air America's launch, on March 31, 2004. At the time, Mr. Cohen still worked at the network.

Mr. Cohen has not responded to requests for comment from the Sun.