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!