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Channel 51 Files for Bankruptcy; Sale Is Off

January 27, 1990|KEVIN BRASS

United States International University has asked about 35 salaried employees to delay picking up their paychecks, after a deal to sell the university's interests in KUSI-TV (Channel 51) collapsed, the university's acting president said Friday.

"We simply asked those that could afford to wait a few days not to pick up their paychecks," Kenneth McLennan said. "Unfortunately, it has happened before, and our employees have always been loyal and supportive."

Of the university's 300 salaried employees, only administrators making more than $40,000 a year were contacted, according to Dennis Agle, the school's business manager.

The university is "reviewing all its options" to raise money, McLennan said. Hourly employees have already received their checks, as well as about 200 of the salaried employees, Agle said.

Michael McKinnon, minority owner of the station, was trying to buy out the school's share. He had agreed to pay the university $1 million in cash to help it meet payroll and other obligations.

However, late Thursday afternoon, the TV station filed for Chapter 11 protection under the U.S. Bankruptcy Code, which killed the deal, McKinnon said.

McLennan said, "We simply couldn't come to an agreement with Mr. McKinnon."

McKinnon said he was offering $17 million for the university's 74% of the station, in addition to forgiving more than $10 million of debt, including equipment.

He said details of the $1-million loan had been agreed to before the bankruptcy filing was announced.

"We contest the word \o7 loan\f7 ," McLennan said. He refused to elaborate, citing the possibility of future litigation over the negotiations.

The university owns 74% of University Television Inc., which owns independent station KUSI; McKinnon owns 26%. The financially troubled university has been attempting to sell its share to raise funds.

However, efforts have been complicated by provisions in the company's charter that give McKinnon extraordinary control, including veto power over most major decisions and the right to match any offer for the station.

McKinnon, who owns three TV stations in Texas, owns most of the station's equipment. The lease on the equipment expired in September and has not been renewed.

In December, McKinnon filed a suit in Superior Court seeking the return of the equipment. A preliminary hearing had been scheduled for 2 p.m. Friday, but it was postponed following Thursday's bankruptcy filing.

In the filing, the station listed assets of $11.8 million and debts of $14.1 million. Of the debt, $6.5 million is a secured loan owed to McKinnon.

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