California doesn’t want to let go of Interep


Interep hasn’t been doing business anywhere since October 2008, but the California Secretary of State doesn’t want to let the former radio rep firm surrender its business license. Meanwhile, the first of the former Interep clients sued by the bankruptcy trustee has denied it owes any money.

As Chapter 7 bankruptcy trustee, Kenneth Silverman, sent a “Certificate of Surrender of Right to Transact Intrastate Business” to the State of California, as he no doubt did to numerous other states. What he got back on the letterhead of Debra Bowen, Secretary of State, State of California, was a notice signed by a staffer that the document had to be signed by a corporate officer and that Silverman, as trustee, did not qualify. Silverman resent the document with a copy of the US Bankruptcy Code spelling out the powers of the trustee, but got back a longer response from a higher ranking Bowen staffer again rejecting the document and demanding that Silverman produce a specific order from a federal bankruptcy judge giving him authority to sign the document on behalf of Interep.

Silverman has now submitted to Judge Robert Drain an order “clarifying” his authority. It cites the order that Drain signed on  June 1st giving Silverman, as trustee, the authority to wind-down the bankruptcy estate of Interep and adds a paragraph giving Silverman specific authority to sign, file and deliver documents to cancel Interep’s “…right to transact business in the State of California or any other jurisdiction…”

As for Silverman’s attempt to collect millions of dollars that he claims is owed to the bankruptcy estate by numerous radio groups who were formerly Interep clients, it appears that Sheridan Broadcasting Corporation is the first to file a formal response. You will not be surprised to learn that Sheridan says that it does not owe any money whatsoever and asks that the bankruptcy court dismiss the claim.

RBR-TVBR observation: The bureaucracy of the State of California is a wonder to behold. Although we have never lived in the state, we still managed to have a run-in with the overly-zealous California taxing authority, which attempted to collect state income tax on a 401(k) rollover, even though it was clearly prohibited by federal law from doing so. Not to mention that if the money had actually been taken out and become taxable, the state eligible to do so would have been Maryland, not California.