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Published: Monday, 3/26/2007

Legal entaglements hamper WNGT-TV's future

BY DAVID YONKE
BLADE STAFF WRITER

When Lamaree Marty Miller and his wife, Linda, bought a low-power television station in 1996, they were proud to call it the only minority-owned station in Toledo.

But the couple and WNGT-TV, Channel 48 renamed WMNT last September are now fighting numerous court judgments and liens and have been involved in a nine-year struggle with Cornerstone Church, one of the area s largest with 6,000 members, for control of the station.

In January, 2005, the Michigan leasing firm Teletech Inc. filed a motion in Lucas County Common Pleas Court asking for a receiver to take over TV 48 and L&M Video Productions Inc., a corporation founded by the Millers.

Teletech officials said they wanted the court to preserve the assets of the station broadcast over the airwaves on Channel 48 and on Buckeye CableSystem on Channel 58 in hopes of someday collecting on a $238,447 judgment.

Lucas County Common Pleas Court Judge Charles Wittenberg granted Teletech s request on Feb. 16, 2005, appointing Sylvania attorney Ralph DeNune III as receiver, making him legally responsible for operating the station and overseeing its finances.

Mr. DeNune, who has handled about 75 other receivership cases in more than two decades, said his experience with TV 48 has been uniquely challenging.

This is the most frustrating case, he said. I ve seen some unusual ones, but have I had one like this? Absolutely not.

When he first took over the receivership of TV 48, Mr. DeNune said he hoped to find a way to turn things around for Mr. Miller, 49, of Toledo.

I really wanted Marty to succeed in the beginning. He had a dream, and he had some wherewithal. He graduated from St. Francis [de Sales High School] and Bowling Green State University. He s been in the business a long time.

But as the receivership progressed, he said he started to see some warning signs. And those warning signs eventually turned into red flags.

In July, 2006, Mr. DeNune removed Mr. Miller as operator of TV 48 and turned management of the station over to Matrix Broadcasting Communications, Inc., a corporation formed by Cornerstone to run the station.

Matrix, whose president is Jerry Jones, a retired Blade salesman, received Federal Communication Commission approval to change the station s call letters to WMNT. The letters stand for My Network Television, a reference to a new television network called My Network, with whom Matrix signed a long-term affiliation agreement.

I feel comfortable with [Matrix] running it, Mr. DeNune said. I feel it s in good hands. ... Now I sleep at night.

He said he decided to remove the Millers from control of the station after making several unannounced visits to WNGT s offices when they were located in the National City Bank Building in downtown Toledo.

Mr. DeNune said he stopped in five or six times, at different times of day, and every time found neither Mr. Miller nor any other station employees in the office.

Nobody was there. The doors were open. The station was broadcasting. Anybody could have walked in and broadcast anything, Mr. DeNune said.

They could have plopped in a pornographic tape and who knows how long it would have been til someone caught it? When something like that happens, the FCC goes after one guy: the license holder. And that s me.

Nothing to worry about

Mr. Miller countered that broadcast equipment is not easy to use, and that an average person would not know how to get a program on the air. In addition, he said, it was unlikely that anyone would do so because not many people knew where WNGT s offices were located.

But unattended live television broadcasts were not Mr. DeNune s only concern.

On one of his random stops, he looked around the office and saw an envelope, apparently containing a check, addressed to Mr. Miller and WNGT-TV.

I saw the envelope with a check in it, held it up to the light, and saw that it was for $108, the receiver said.

It piqued his curiosity.

Marty Miller testifi ed that  about $70,000  in WNGT checks may have been deposited in personal or business accounts. Marty Miller testifi ed that about $70,000 in WNGT checks may have been deposited in personal or business accounts.
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I figured I d wait to see if Marty would tell me about it. He never did.

As court-appointed receiver, Mr. DeNune said he is responsible for overseeing all dealings of the corporation.

Not long after finding that $108 check, Mr. DeNune said he got a call from a San Diego collection company claiming that one of its infomercial clients had paid for airtime on TV 48, but the Toledo station never broadcast the programs.

I asked if they had copies of the checks, and they did. They e-mailed me copies, Mr. DeNune said.

Soon after, a representative from Greater Grace Temple, a Detroit church, called with similar complaints about paying for programs that were never aired.

Those calls were disturbing to Mr. DeNune.

I was embarrassed and mad as hell, he said.

In response, Mr. Miller said that Mr. DeNune had given him permission to sell advertising on TV 48 while the company was in receivership.

Mr. DeNune said that although it was true that he had given Mr. Miller permission to sell airtime, Mr. Miller should have told him and Judge Wittenberg about all income and expenses.

Mr. Miller said he used the funds to pay business expenses, including the salaries of TV 48 s employees.

Sylvania attorney Ralph DeNune III, appointed as receiver, says the Channel 48 TV receivership case is the  most frustrating case  he has seen as well as a uniquely challenging one. Sylvania attorney Ralph DeNune III, appointed as receiver, says the Channel 48 TV receivership case is the most frustrating case he has seen as well as a uniquely challenging one.
Enlarge

Since I initially brought these people in, I felt that they were my responsibility, even though they belonged to the receiver, Mr. Miller testified in a December federal bankruptcy court hearing.

Because otherwise, you know, you have a really bad situation, especially when all these employees are black and everybody that s running stuff are white.

He testified in federal court that about $70,000 may have possibly went through my hands from checks made out to WNGT that he deposited in business and personal checking accounts.

Among the business expenses he cited were seven or eight visits to the Franklin Park 16 Cinema Deluxe in May, 2006 the month the Millers filed for corporate bankruptcy according to his bankruptcy court testimony.

Mr. Miller said he was taking clients to lunch and movies in order to sell them advertising.

Among other expenses Mr. Miller acknowledged in court there were four checks totaling $2,100, which he testified he gave to a friend in need.

I had a personal friend that was in danger of losing their home, he testified. It was more just to help him out of a real quick jam.

Robert Pitts says the church does not plan to turn TV 48 into a religious channel because there already is one
that does a decent job. Robert Pitts says the church does not plan to turn TV 48 into a religious channel because there already is one that does a decent job.
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Station s debt rising

Mr. DeNune decided to put TV 48 up for sale and to use the proceeds to pay creditors. He said the station is about $1.6 million to $1.7 million in debt because of court judgments, liens, legal fees, and operating expenses.

The debt has been mounting as the station continues to broadcast with minimal advertising revenue coming in, he added.

Mr. DeNune said his research showed the market value of low-power television stations can vary wildly.

Low-power TV stations sold for anywhere from $100,000 to $1 million, depending on the market and the revenue. And this station has no revenue, Mr. DeNune said.

Mr. Miller said TV 48 has been evaluated by two consulting firms that each assessed its worth at between $4 million and $5 million.

In addition, Mr. Miller said, the station has a Class A broadcasting license, which would allow it to boost its signal strength from 11,000 to 150,000 watts, further raising its market value.

After the receiver put WNGT on sale, Mr. DeNune said several potential buyers called to discuss terms but in the end he received only one solid offer from Cornerstone Church.

Earl Murry says he believes that the Millers were wronged by the Pitts brothers and he wants to help the couple regain control. Earl Murry says he believes that the Millers were wronged by the Pitts brothers and he wants to help the couple regain control.
THE BLADE/ALLAN DETRICH Enlarge | Buy This Photo

Cornerstone bid $913,854.39, a figure that Robert Pitts said would cover most of its investment plus expenses.

The church would take ownership in lieu of being paid back what it is owed, but it also would be responsible for the receivership expenses such as rent and administrative costs incurred over the last two years a significant sum, according to Mr. DeNune.

The deal is still pending, however, awaiting the FCC s decision on whether to grant the church s request to assign the broadcast license to Matrix, the Cornerstone subsidiary.

Clyde Ensslin, an FCC spokesman in Washington, said the agency does not comment on license applications.

Mr. Miller said Cornerstone got away with such a low bid because of a conspiracy involving the church, the receiver, and other unknown but influential people.

Mr. Pitts said the church s goal was simply to recoup its investment.

If Mr. Miller were to come up with a legitimate offer, he said he would gladly consider selling the station.

Mr. Miller, meanwhile, has continued to wage a war of documents on all available fronts in an effort to hang onto TV 48.

In addition to filing complaints with the FCC, Mr. Miller and his wife voted to file a petition with U.S. Bankruptcy Court for Chapter 11 protection for L&M Video Productions, of which the Millers own 63 percent and Cornerstone 37 percent.

Jerry Jones is president of Matrix Broadcasting Communications, Inc., a corporation formed by Cornerstone to run the station. Jerry Jones is president of Matrix Broadcasting Communications, Inc., a corporation formed by Cornerstone to run the station.
FRASER / BLADE Enlarge

Cornerstone is challenging that move, however, saying the corporation s board did not follow proper procedures and that the case does not belong in bankruptcy court.

In February, L&M Video Productions announced it was holding a board meeting in the downtown Toledo-Lucas County Public Library.

The Feb. 14 meeting was postponed due to a winter storm, but on Feb. 21, Mr. Miller and his wife (she voted by proxy and by phone) voted to remove Robert Pitts from the board and elect Earl Murry, a University of Toledo professor, as president of L&M.

Robert Pitts attorneys assert that the board meeting was held in violation of state law, thereby rendering any votes invalid.

In February, Mr. Miller filed a federal discrimination suit against Cornerstone Church and L&M Video Productions the company that he and his wife founded and of which they are majority owners claiming that his civil rights were violated when he was dismissed as an employee of TV 48. That suit is pending before Judge James Carr in U.S. District Court.

Mr. Miller also filed a federal complaint with the U.S. Postal Service over a decision by Mr. DeNune and Cornerstone to forward the station s mail from Mr. Miller s personal post office box to Cornerstone s and Matrix s offices on Reynolds Road.

In addition, Mr. Miller filed complaints with the Toledo Bar Association alleging ethics violations against four of Cornerstone s attorneys.

The attorneys said those allegations were dismissed. The bar association said investigations are confidential unless further charges are filed with the Ohio Supreme Court.

Rallying new investors

For now, the future of TV 48 is up in the air.

Mr. Miller has rallied a new group of investors, led by Mr. Murry, who said they are willing and able to put up the money to pay for attorneys to continue Mr. Miller s legal fight for ownership of the station.

The new supporters include local businessmen and brothers Gabriel Barrow and William Barrow, friends of Mr. Murry.

Once I saw what these guys [at Cornerstone] did to them, it really bothered me, William Barrow said. There s no way they re going to get away with this.

Mr. Murry, a former Cornerstone member, said he believes that the Millers were wronged by the Pitts brothers Robert and Michael and he wants to help the couple regain control of the station they owned for 10 years.

He added that much of the controversy predates his involvement with the Millers, and that he also considers TV 48 to be a good investment.

Cornerstone, meanwhile, continues to await word from the FCC on its application for TV 48 s broadcast license.

The FCC decision could come any day, or it could still be months away.

W. Kenneth Ferree, a Washington attorney specializing in FCC cases, said the agency usually moves quickly when a station is in receivership because it doesn t do anybody any good when it s in that situation.

But when a license is contested, the process can slow down significantly, he added. Even so, such cases are usually resolved within a year, according to Mr. Ferree.

A decision couldn t come soon enough for Robert Pitts.

Once that license is transferred, everything else is moot, he said.

The church does not plan to turn TV 48 into a religious channel, Robert Pitts said, because there already is one in town [WLMB-TV, Channel 40] that does a decent job.

WMNT might set aside blocks of time for religious shows, he said, but most of the programming will be mainstream shows from its My Network Television affiliation.

I really haven t had time for a plan of action, Mr. Pitts said. That s because I ve been too busy trying to get the license in hand and to deal with the different court issues that Marty has brought about.

Contact David Yonke at:dyonke@theblade.comor 419-724-6154.



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