Equity Media trustee wins $2 million payment with OK of settlement

By Kali Hays

New York, Sept. 16 – Equity Media Holdings Corp.’s Chapter 7 trustee M. Randy Rice obtained approval of a fraudulent transfer lawsuit settlement with Luken Communications, LLC, according to a Tuesday filing with the U.S. Bankruptcy Court for the Eastern District of Arkansas.

As previously reported, Rice filed a complaint against Luken Communications and Henry G. Luken III for the avoidance and recovery of fraudulent transfers in connection with Luken Communications’ purchase of Retro Television Network.

The trustee was awarded $47.4 million in damages by a jury, but Luken filed bankruptcy two days later. Rice was subsequently awarded a $65.9 million judgment by the U.S. District Court for the Eastern District of Tennessee.

Rice said he would have received less than $1 million under Luken’s plan of reorganization, and that amount would come only after all appeals of the jury verdict and district court judgment were exhausted.

Under the proposed settlement, Rice will receive a $2 million settlement payment from Luken’s liquidating trustee.

In exchange, the trustee agreed to vote in favor of Luken’s plan.

Based in Little Rock, Ark., Equity Media owns and operates television stations. The company filed for bankruptcy on Dec. 8, 2008, and its Chapter 11 case number is 08-17646.

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