FOR IMMEDIATE RELEASE
SANTA CRUZ, Calif., August 12, 2016 The Board of Directors of the 'Pataphysical Broadcasting Foundation, Inc. (DBA KUSP) today announced it has filed for Chapter 7 bankruptcy.
"It is with regret that the Board takes this final step in KUSP's long and storied history," said Board President Matt Farrell. "While we all wished for a different outcome, there is no way to responsibly continue in the face of month-to-month operational insolvency and the accumulated debt of the station."
On Friday, August 12, 2016, a "Chapter 7" Bankruptcy Petition was filed on behalf of the Board of Directors of KUSP 88.9 FM and associated translators.
Update: August 22, 2016:
Below are Frequently Asked Questions the Board hopes will be helpful in understanding the decision. It is, of course, with great regret that this bankruptcy protection was considered the last resort.
1. The station was turned off on August 1st. Why? What happened?
Answer: The Board, the Foundation, donors and station listeners have been aware of the dire financial condition of KUSP for many months. Fundraising to meet monthly obligations was insufficient for the station to continue operating.
Cost-cutting measures, including layoffs, downsizing and a new, lower-cost programming format were put in place, but were not adequate to meet monthly financial obligations and KUSP was unable to find funds to pay back obligations to creditors.
2. Why not file for "Chapter 11" bankruptcy, allowing the station to continue and restructure?
Answer: The Board concluded that the station could neither meet its current, ongoing financial obligations (rent, utilities, human resources including unemployment insurance, workers compensation, engineering, maintenance, etc.) nor realistically find funds to pay down accumulated debt; thus, there is no realistic way to restructure without new, assured funding sources that did not materialize.
3. Were creditors calling in their loans?
4. Why are we filing for bankruptcy?
Answer: The station is insolvent. Bankruptcy provides protections to allow the station’s assets to be used to pay debt in an orderly and fair manner overseen by the courts.
5. Who’s in charge now?
Answer: A court appointed Trustee, John Richardson, has taken control of all assets (including the FCC licenses). The Trustee will ensure that creditors are prioritized and that assets are inventoried, appraised and eventually sold to the highest bidder(s). Optimizing the proceeds from asset sales is the Trustee’s sole criteria for the liquidation.
6. What happens to the ’Pataphysical Broadcasting Foundation?
Answer: The corporation will eventually be dissolved pursuant to state law.
7. There is talk of forming a new, community radio station. Can the music library simply transfer to a new, non-profit community radio station without cost?
Answer: No. All assets of any significance and all assets with value must be sold in order to pay off debt obligations to creditors. The disposition of the music library will be the responsibility of the Trustee.
8. What will happen to the license and the licenses for the translators?
Answer: The Trustee will oversee the future disposition of the licenses along with other assets.
9. Is the particular public mission of KUSP one of the criteria used to assess potential buyers?
Answer: No, the Trustee is bound by bankruptcy law to accept the highest qualified bid. Dispositionisposition of the assets will not be ‘mission’ driven.
10. What will happen to the CD and LP libraries?
Answer: Sales of KUSP assets will now be handled by the court appointed trustee, John Richardson. Mr. Richardson has been informed of the CD and LP libraries and the interested parties to date.
11. What is happening with monthly donations to KUSP?
Answer: Sustaining members will not be charged monthly pledges by credit card beginning with the month of August; a notification is pending. Sustaining members who pay via EFT have been contacted and will need to cancel that arrangement with their financial institution.
12. Are there any organizations interested in buying the station license(s)?
Answer: Yes. The Trustee has been made aware of known interest and the sale of the license is now his responsibility.
KUSP 88.9 fm | kusp.org was an independent, community-based, non-profit, interactive multimedia voice which served the greater Monterey Bay Area for nearly 45 years. KUSP was owned by the 'Pataphysical Broadcasting Foundation, Inc.. ('Pataphysics, a concept attributed to Alfred Jarry (1873.1907), French writer of the Absurd, is generally understood to be the science of the laws governing exceptions to the rules.)