Payday-loan shark Chuck Brennan was going to call his pawn shop radio station “Badlands Radio.” But now with his Badlands Pawn/tattoo parlor/gun range/Mad Max fantasy land classing up Russell Street, he’s calling his radio station “Guns Gold and Rock-n-Roll Radio.”
Branding master Brennan is breaking his brand with this unwieldy name because a Texas broadcaster already owns the domain name BadlandsRadio.com and didn’t want to share the “Badlands Radio” brand with Brennan.
This minor failure of branding figures centrally in Brennan’s response to and countersuit against Brandon-based Sunny Radio owner John Small.
Recall that Brennan signed a contract with Small to buy Sunny Radio for $1.5 million last February, then reneged and bought the University of Sioux Falls’ radio station in May. Small claimed about $520K of the $750K in earnest money that Brennan placed in escrow; Small then sued Brennan in July for breach of contract and demanded the remainder of the earnest money (currently frozen in a Sioux Falls Federal Credit Union account), plus another $750K and additional damages.
In a response and counterclaim filed October 29, Brennan argues that his Asset Purchase Agreement (APA) with Small to acquire Sunny Radio’s AM and FM Sioux Falls stations was voided by Small’s misrepresentations. Specifically:
In executing the APA and Escrow Agreement, Badlands relied on Small’s representations regarding other offers and his statements about the value of his stations, and his previous assurances that Badlands could use the “Badlands Radio” name and obtain the www.BadlandsRadio.com domain name. If Small had not made these representations and threats to sell what Small had characterized as the only locally-available station that could meet Badlands’s needs to someone else, Badlands would not have executed the APA or Escrow Agreement [Answer, Counterclaim, and Crossclaim of Badlands Airtime, LLC, and Charles C. Brennan, Cup O’Dirt LLC v. Badlands Airtime, LLC; Charles C. Brennan; and Sioux Falls Federal Credit Union, 49CIV15-001949, Minnehaha County, 2015.10.29].
Serial entrepreneur and business titan Brennan claims that one small-town radio owner duped and threatened him into signing a $1.5-million contract. If you buy that, I’ve got a radio station in Fruitdale I’d like to sell you.
Brennan claims that he “knew John Small… for many years and thought he could trust him” [Brennan Answer and Counterclaim, 2015.10.29, parag. 6]. In his Plaintiff’s Reply of November 12, Small says he was merely “acquainted” with Brennan “from one interview on KZOY, through advertising done by Brennan’s payday loan business, a few emails and attendance a few public events before discussions of the KZOY purchase began” [parag. 4].
Whatever level of trust Brennan had in Small, he has no grounds for expecting Small to deliver the Badlands Radio brand and domain name. The thin ground on which Brennan bases this claim appears to be one October 8, 2014, e-mail from Small to Brennan, which Brennan helpfully provides to the court in a September 28, 2015, affidavit:
“I think the company that has BadlandsRadio.com would sell it for the right price,” Small tells Brennan. Small notes that it’s not his place to try negotiating with the owner of that domain name. The February 2015 contract agrees on Small’s role: the APA does not require Small to make any effort to acquire the Badlands Radio domain name or brand or anything else.
But on April 27, 2015 (a week after the FCC approved the Sunny Radio license transfer and Small, per the APA, transferred some of the earnest money from escrow to his account), Brennan goes ape on Small when Tom Imber, owner of Badlands Radio in Texas, e-mails Brennan that he doesn’t want to share (key word) his valuable brand and domain name:
What Brennan portrays as a door slammed shut sounds more like and invitation to come in and talk turkey. Imber doesn’t want to share his property with an imminent competitor in the global market of online streaming (note Imber’s statement that AM/FM radio is “history”). He talks up the value of his property, then says, “All of this has really made us think and although we have never thought of selling the Badlands Radio brand, we will consider it.”
Imber’s April 2015 e-mail confirms Small’s October 2014 supposition: the guy who owns BadlandsRadio.com may sell the name for the right price. Imber offers to talk turkey, but Brennan chickens out and uses his inability to acquire “Badlands Radio” for free as an excuse to go buy a cheaper radio station and break his contract with Small.
Then we have the comic farce of a payday lender complaining that a businessman used high-pressure tactics to take advantage of his “strong desire” to make a deal.
Recall that Brennan offered Small $1.5 million for Sunny Radio in October 2014. In February 2015, Brennan tried to negotiate a lower price. Small stuck to his guns: $1.5 million or hit the bricks. Let’s review the February 17, 2015, e-mail exchange, again illuminatingly provided to the court by Brennan in a supplemental affidavit on October 2, 2015:
Brennan makes four statements to Small in his February 17 e-mail that undermine his case against small.
- “1.5mm is nothing to me and the money is there.” If $1.5 million is nothing to Brennan, then he surely could have found a similar negligible amount to buy BadlandsRadio.com from the Texas owner.
- “There is no other buyer and the station is overpriced.” Brennan says here he doesn’t believe Small’s “threats.” Yet in his counterclaim, Brennan says those threats compelled him to sign the APA the next day.
- “…it is My fault for not doing my homework more and just relying on your word that everything will just be smooth as silk.” Brennan says here that he knows he shouldn’t just trust the other party in a contract negotiation but should do his own homework (that sounds more like the entrepreneurial titan Brennan says he is outside of court).
- “This… is a nice to have for us, not a must have.” The antecedentless this leaves me guessing, but the context suggests this deal. Brennan here indicates that threats should have no effect, that he could walk away from this deal and pursue other options.
Brennan says in his October 2 supplemental affidavit [parag. 7] that he and Small were both “posturing,” but words on the record have meaning. As Small states in his November 12 reply, “the Badlands defendants were fully aware of the risks, actual facts or other circumstances through their own investigations, expert consultants, reports provided by COD or expressly stated their disbelief of matters they attribute to COD….” Small dismissed the allegation that Brennan would not have bought Sunny Radio if he had known he was the only possible buyer as “so inherently ill-premised as to be its own insuperable bar.” That’s splendid lawyerspeak for, “What a load of crap!”
None of Chuck Brennan’s arguments will get him a better name for his pawn-shop radio station. The arguments presented in his counterclaim seem to have little more chance of winning him any money back from John Small.
Brennan and Small next square off in Minnehaha County court in a motions hearing before Judge Mark E. Salter on Tuesday, December 15, 2015, at 9 a.m.