ST. LOUIS (AP) - Creditors in Roberts Broadcasting Co.'s bankruptcy case will be allowed to sue other businesses owned by Michael and Steven Roberts in order to recover money transferred from four TV stations to the brothers' hotel and real estate operations, a judge has ruled.
Roberts Broadcasting, which is based in St. Louis, filed for Chapter 11 bankruptcy in October, citing debts totaling more than $4 million. However, several real estate and hotel businesses also owned by the Roberts brothers were not included in the bankruptcy filing.
Although it initially denied doing so, Roberts Broadcasting acknowledged that it had transferred more than $1 million to other businesses owned by the Roberts brothers to fund payroll and operating expenses, The St. Louis Post-Dispatch reported (http://bit.ly/tNTgMY).
Since the transfers were revealed, $50,000 has been returned to Roberts Broadcasting from other entities, Roberts Broadcasting's attorney, Tom Dewoskin, said in a hearing Wednesday.
Last week, creditors in the bankruptcy case filed a petition asking for the right to sue the other Roberts companies to recover the transferred funds. The creditors said they were concerned they would lose "a race to the courthouse" against other creditors, citing numerous judgments, lawsuits and liens against the brothers' real estate businesses.
Judge Barry Schermer on Wednesday sided with the broadcasting creditors, saying Roberts Broadcasting hadn't made sufficient effort to recover the transferred funds.
"It's clear to me that the debtor has declined to pursue those transfers," Schermer said.
David Farrell, an attorney for the creditors, said he'll try to determine how much money was transferred in the last two years and then begin negotiations for repayments.
Dewoskin said Roberts Broadcasting will file a reorganization plan by the end of January that will detail a plan to pay all creditors within four years. The next meeting of creditors in the bankruptcy case is set for Friday.
Roberts Broadcasting owns WRBU-Channel 46 in St. Louis, and stations in Columbia, S.C., Jackson, Miss.; and Evansville, Ind. The Roberts brothers also own several real estate and hotel businesses including the Roberts Orpheum Theater and the Roberts Mayfair hotel, both in downtown St. Louis, and hotels in other states.
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Information from: St. Louis Post-Dispatch, http://www.stltoday.com