FCC causes license move to receiver to fall incomplete

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GavelGB Communications was licensee of WHNR-AM Cypress Gardens FL, and fell into default on two separate loans. The license went to a receiver, but a subsequent court order said only the stock of GB should have, without the license. Here’s how the FCC decided the matter:


GB principal Martin Santos defaulted on a $48K and change loan from one creditor and $770K from the other. On 8/8/11, the Circuit Court of the Tenth Judicial Circuit in and for Polk County, Florida produced a default judgment for one of the creditors, and on 2/16/12, at the creditor’s request, George R. Reed was appointed receiver. One of the assets assigned to Reed was the station’s license.

Petitioners La Poderosa, LLC and Carlos S. Guerrero objected to the license transfer, saying the parameters of Reed’s authority were vague, and arguing that Reed should only have authority over Santos’ stock.

The FCC said it would work in concert with the court and saw no reason not to honor the license transfer.

However, a subsequent 6/12/12 ruling eliminated any doubt, according to the petitioners, making it clear that Reed had authority over the license. Reed argued that the ruling was an enhancement that merely built on the previous ruling and that the license transfer was still legitimate.

In fact, he closed on the transfer a year shy of the original court ruling 8/4/12. This had taken place without notifying the FCC about the 6/12/12 court ruling, and petitioners argued that it should have been brought to the FCC’s attention.

The FCC agreed with the petitioners, and also agreed that the second court ruling did make it clear that only stock in GB was subject to Reed’s receivership. The petition to reconsider the transfer of WHNR to Reed was upheld, and Reed was ordered to file immediately to transfer it back to GB. Further, Reed was admonished for not supplying the FCC with the 6/12/12 ruling.