Brill Media Sues Its Former Creditors

Brill Media Co. is seeking $300 million in damages in a lawsuit against Los Angeles investment company Trust Co. of the West and other former creditors, alleging they wrongly forced it into bankruptcy protection last year.

The Evansville, Ind.-based radio station and newspaper publishing company is seeking $75 million from TCW and other investors who bought Brill Media’s bonds. Those investors eventually filed an involuntary bankruptcy lawsuit against Brill when it defaulted on interest payments.

Brill also is seeking $225 million in punitive damages in the lawsuit filed last week in Los Angeles County Superior Court.

TCW spokesman Michael Utley said, “The allegations are without merit, and we intend to defend the suit vigorously.”

The complaint alleges TCW representatives learned private information from Brill Media owner Alan Brill by signing confidentiality agreements and improperly released that information to others, including parties interested in buying some of Brill’s properties.

The lawsuit also alleges that Brill could have gotten $22.5 million -- more than enough money to make interest payments to creditors -- by selling radio stations in Colorado and Wyoming. The complaint says that deal collapsed after creditors contacted the would-be buyers and threatened them with legal action and complaints to the Federal Communications Commission if the sale proceeded.

Brill Media was forced into bankruptcy protection by bondholders headed by TCW after Brill Media defaulted on a $6.3-million interest payment. The company owed $147.6 million.

In August, a bankruptcy judge approved the sale of 13 of Brill Media’s radio stations and the company newspaper group, which includes the Morning Sun, a daily newspaper in Mount Pleasant, Mich., and 23 weekly newspapers in Michigan, for $108 million. The bankruptcy, however, remains unresolved.