Thursday, May 15, 2008

Creditors force Pappas into Chapter 7

Creditors are forcing Harry J. Pappas, the head of Pappas Telecasting Companies, to file for Chapter 7 personal bankruptcy, a move that could result in a forced sale of his personal assets to repay debts, according to the AP and Fresno Bee.

Pappas is chief executive and president of Pappas Telecasting, which operates 30 TV stations including KTNC Channel 42 in San Francisco. The stations have been for sale for several months.

On Saturday, Pappas Telecasting put 13 of its 30 stations into Chapter 11 bankruptcy including Channel 42, a move that would free the company from lawsuits by creditors while it reorganizes. The Chapter 11 filing did not apply to the Pappas family's two radio stations, KTRB-AM 860 San Francisco and KMPH-AM 840 Modesto.

On Monday, creditors filed for Chapter 7, saying Pappas and his wife, Stella, personally guaranteed $30 million of a $284 million loan that Pappas Telecasting secured in March 2006, according to the Fresno Bee. Creditors said the $284 million loan was based on an agreement that Pappas would sell enough of his television stations to repay $100 million of the debt.

Pappas Telecasting owes more than $5.8 million to its top 20 creditors, the Bee said, citing Saturday's filing. The biggest sum owed, $1.4 million, is to Fox Broadcasting. Pappas has three Fox affiliates. (Photo credit: Pappas Telecasting Web site)

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