KDHX St Louis Auction Winner
A federal bankruptcy judge has awarded Gateway Creative Broadcasting Inc, with a $8.75 million bid, the rights to purchase KDHX/St Louis. Gateway Creative Broadcasting owns KLJY/St Louis (Joy 99.1) and KXBS/ST Louis (BOOST Radio).
K-LOVE Inc came in second with a bid of $8.5 million.
“It went very smoothly,” said KDHX bankruptcy lawyer Robert E. Eggmann of the auction in U.S. bankruptcy court held Friday.
The volunteer group “LOVE of KDHX” plans to object to the sale. Other parties have until 5 p.m. Tuesday to file objections.
“We think we have very good and persuasive arguments for why this sale should not happen,” said Roy Kasten, a member of LOVE of KDHX and a former volunteer DJ at the radio station. “We look forward to making those arguments in court and more importantly we remain committed to a community plan to reorganize KDHX as a community FM radio station that serves the St. Louis metro region and beyond.”
Gateway Creative Broadcasting won the bid for KDHX, but the sale is not yet final. The court must still hold an evidentiary hearing to determine whether the sale is in the station’s best interest, regardless of any objections.
If the court approves the sale of KDHX at the June 9 hearing, Gateway Creative Broadcasting will begin the process of acquiring the FCC license, which could take up to six months or more, according to attorney Robert Eggmann.
Back Story – A federal bankruptcy judge set May 30 for a public Zoom auction for the broadcast license and tower of KDHX/St. Louis. The decision follows internal disputes and a March bankruptcy filing. The legal and financial battle over the station’s future intensifies as the original bidder, K-LOVE, is now seeking compensation for its early involvement.
Double Helix Corporation, owners of KDHX, filed for Chapter 11 bankruptcy with around $2 million in debt. Educational Media Foundation (EMF) offered to buy the station for $4.35 million, with increased pricing if the deal closes quickly—$4.85 million within six months or $4.6 million within a year. EMF also agreed to provide financial support during the bankruptcy to keep KDHX operational. Double Helix has used $127,000 of a loan from K-LOVE according to its attorney.
In December Double Helix and St. Louis-based Christian radio group Gateway Creative Broadcasting Inc. had agreed to a $5.5 million transaction for KDHX.
Weeks after EMF’s initial offer in, U.S. Bankruptcy Judge Kathy A. Surratt-States temporarily paused the sale.
A group of KDHX supporters has yet to submit a proposal to acquire the station, although they originally proposed to do so.
Under court-approved bidding rules, any successful buyer must reimburse EMF up to $300,000 for expenses and pay a $152,000 break-up fee, as EMF is the “stalking horse” bidder. Both Gateway Creative Broadcasting and the advocacy group LOVE of KDHX objected to these added costs.
A hearing to approve the sale is scheduled for June 9.
