Remember how payday lender Chuck Brennan announced last December that, among the big investments he was making to build his Badlands Pawn entertainment-plex, he was buying John Small’s Sunny Radio AM and FM stations? That part of the deal isn’t going well:
In a lawsuit filed July 22, 2015, in Second Circuit Court in Sioux Falls, Small’s Cup O’ Dirt LLC alleges that Brennan’s Badlands Airtime LLC is reneging on the deal. The complaint and exhibits lay out the following narrative:
In October 2014, Small and Brennan had an e-mail exchange about Brennan’s desire to draw Small’s station into his Badlands Pawn plan. Brennan said “the best I’m going to be able to do” was $1.5 million to acquire the station: half up front, half in ten monthly installments from Badlands Pawn’s opening day next November.
Brennan announced his purchase of Sunny Radio at the December 26, 2014, press conference, even though he had no final agreement with Small. The complaint says that “splashy” presser caused Small to lose advertisers and employees. Brennan subsequently asked Small to lower his price. Small stuck to the original offer, and on February 25, 2015, the two signed an Asset Purchase Agreement. Brennan would put $750,000 earnest money in an escrow account at Sioux Falls Federal Credit Union. The agreement said the escrow money “shall be paid to Seller as partial payment of the Purchase Price upon receipt of the FCC consent.”
On April 21, 2015, Rob Feller, general manager of Badlands Radio Network, e-mailed Small to say, “the grant has been issued for the license.” That’s the FCC consent. Small contacted the credit union, found the escrow money was now available for transfer, and accessed the money to pay debts and operating expenses.
On May 20, 2015, Brennan signed an Asset Purchase Agreement with the University of Sioux Falls to acquire their radio station. (The deal specified that Brennan would move all operations to his pawn shop, but just in case his facility wasn’t ready, USF said he could rent their broadcast facility for a measly $500 a month. Come on, USF, what happened to your Entrepreneurial Studies program? Think bigger!)
Small says Brennan told him he wanted to acquire both stations. But on June 11, 2015, Brennan asked why his money wasn’t still in the escrow account. He went to Sioux Falls Federal Credit Union and got them to freeze the remaining $230,559.41. Small says that money is now his, not Brennan’s, per their February purchase agreement, and now we’re going to court. Small asks that the court order the escrow account unfrozen, plus extract $750,000, additional compensatory damages, punitive damages, attorney fees, expenses, and anything else the court sees fit to throw in. Small’s lawyer, Steven W. Sanford of Sioux Falls, also asks for a jury trial, which means we can all have fun listening in.
Gee, maybe Brennan’s first broadcast on Badlands Radio can be live coverage of his own trial. Sounds like a publicity coup, Chuck! Go for it!
This is all very strange. I wonder why Chuck would commit to buy the Sunny Radio stations, and then purchase KCFS after the Sunny Radio purchase was approved? Maybe he thought that the daytime-only AM signal would limit things? Or did he find out that the FCC limits broadcast translator stations to only 250 watts, and thus have limited range?
The sad part is that if KCFS is sold, Sioux Falls will lose it’s last broadcast college station. Perhaps students are losing interest in running KCFS as I haven’t read or seen any news articles regarding KCFS being sold to Brennan. Even so, KCFS could have been sold to another community group or organization that could have launched, say, an all Spanish language station or perhaps a station catering to the various ethnic groups in the city. KCFS could still provide a real public service rather than becoming an over-commercialized hard rock outlet.
That brings me to my final question… how will Chuck expand his hard rock empire as he desires to do? Buy up more small town stations, end their local formats, and just simulcast from Sioux Falls? I hope it doesn’t come to that.
Sleezy is as sleezy does.
I have a feeling that this is the first of many times we’ll hear the words “Chuck Brennan” and “in court” in the same sentence.
This isn’t the first time Mr. Brennan has been sued for something like this. https://docs.justia.com/cases/federal/district-courts/nevada/nvdce/2:2009cv02441/70881/67
Wow, Chuck plays with the big boys out there in Vegas. Kind of explains how this shakedown deal got legs here in Sioux Falls. Starting to smell like more that just a little payday loan argument, he is bringing in the heavies. Maybe we need to recruit those guards down there at the recruitment center and tell they can have all they can eat at the buffet table to man the battle lines.
Hmm… the day that this article was published, Brennan cancelled his “Farewell to Husets” concert due to apparent construction delays.
Coincidence? Or did this lawsuit have something to do with the sudden cancellation?
It’s something to think about.
Interesting! I hope he doesn’t continue to break promises to the many people I know personally who he’s hired for his grand plan. They’re putting a lot of faith in this guy. And the way the city is fawning over him is embarrassing. Brennan makes his money the same way My Man Mike made his so they have quite a bit in common.
What? Construction delays? Let’s see, what’s Brennan’s batting average for organizing big concerts? He couldn’t line up bands for “Chuck’s Kegger.” He did organize music for RibFest in 2014, didn’t he?
Scott, interesting case… although Cundiff appears not to have made that case very well. Cundiff also filed a complaint against Brennan with the Federal Election Commission, to no avail. Is there any evidence that Cundiff was a justifiably disgruntled employee?
Flipper, it is interesting to think of Chuck Brennan as the next generation of Huether and Sanford usury dons. Brennan styles himself as the next Sanford, thinking all of his charitable acts will excuse his predatory capitalism.
That Sioux Falls paper picks up the Small–Brennan lawsuit, and do they give me any credit for breaking the story? Of course not. Sigh. ;-)
Maybe with his big buying/spending spree, Mr. Brennan is overextended. He may need a pause to let payday lending revenue catch up to his payday lender spending. Right now he has a lot of money going out for the pawn shop and nothing coming in from it. He can get out of the hole right now with one simple call to Donald Trump offering to put Trump’s name on something and make Trump a junior partner. To sweeten the pot he could hook Trump up with 80’s bands to play at campaign appearances.
Cory: I barely remember “Chuck’s Kegger”, but researching it online, I learned that he did organize the band lineup for Ribfest in 2014. Apparently he and the Ribfest organizers got into a dispute over profits, according to the article below. Thus, Chuck broke off and decided to create a competing event, which ended up in total failure.
http://www.argusleader.com/story/news/2014/12/09/day-music-fest-june-features-chili-cook/20162943/
The music festival that never was…
“dispute over profits” probably means chuck wanted a bigger share than what the contract originally called for.