Working through bankruptcy allowed Carson City radio stations KPTL-AM and KZZF-FM to pay off creditors while upgrading the FM broadcast signal now heard as far away as Stockton and Fresno.
Under Dwight Millard, better known for building homes in Carson City and Dayton, the stations climbed out of a $1.2 million debt since bankruptcy protection was sought in November 1995.
The last creditors were paid off in March, Millard said.
Millard also took stations appraised at $700,000 when they went into Chapter 11 protection and emerged with a buyer willing to pay $3 million.
Moon Broadcasting of Los Angeles takes over KPTL/KZZF today.
Millard inherited the debt from radio and television personality Craig Swope, who owned KPTL/KZZF from 1991 to 1996. Swope, now at Carson Access Television, received short-term loans but didn't have the revenue to repay $1.2 million.
"Basically, he was undercapitalized from the beginning," Millard said. "He never had the edge to do what he needed to do to promote the radio station."
Millard in 1991 loaned Swope $300,000 to help him acquire the FM station, ultimately converting the loan into stock. Later, Bob Thomas of Carson City became the majority stockholder in the AM station by buying $125,000 in stock pledges.
Thomas sold his interest in KPTL to Millard in 1996, but he hasn't been repaid. He acquired the AM station the same way Millard got the FM: as the largest investors when Swope's short-term debt strategy collapsed.
As Millard acquired the stations and the debt, he was determined to pay off creditors and sell the sister stations.
But he didn't expect it to take four years and cost him nearly $2 million.
"A lot more bruises, a lot later and a lot more dollars," Millard said in describing the past four years of his ownership.
Millard had to fight off a hostile acquisition effort, which drew the attention of the Federal Communications Commission.
Millard had two choices: shut down the radio stations or build a new transmitter to take the KZZF signal where it had never been heard.
"So we had to make a decision," Millard said. "We made an effort to upgrade to a Class C license. That's what we all know was the value (of the stations).
"We were just trying to get everybody their money back. We knew if we could just hang on, we could get everybody home."
Thomas was general manager at KPTL during the first year of bankruptcy.
"It's just natural to fight for survival, especially when you feel you have the potential to do something," said Thomas, a Nevada Appeal columnist and a former Nevada assemblyman. "I've never seen somebody stick by something and bite the bullet like Dwight."
"When Bob came to me and said we had to do something, we were conscious of getting everybody their money back because this is a small town," Millard said. "We attached our names to a debt even though we didn't create it."
About 50 to 60 creditors loaned Swope anywhere from $68 to $201,000, adding up to $1.2 million. Swope accepted another $600,000 in stock pledges with Thomas and Millard accounting for $420,000.
Millard first bought $300,000 in stock plus gave Swope a $46,000 loan. Then Millard put in $900,000 for upgrades and operations and borrowed $650,000 to pay creditors.
A bankruptcy plan was filed in February 1998 and Millard is now in the process of closing bankruptcy proceedings.
"I will recapture nearly all of my money," Millard said. "All the creditors got all their money back. Shareholders will get a vast majority of their money back."
The KPTL/KZZF team saw upgrading the signal as a top priority years ago. While paying off debt, Millard knew the only way out of bankruptcy was investing in a new transmission facility on Slide Mountain.
Until October 1995, KZZF transmitted from Genoa Peak with a signal that barely reached beyond Carson City and Carson Valley.
KZZF was kicked off Genoa Peak in October 1995 when its lease was not renewed. The station used the federal Signal Emergency Act to set up its transmitter on Slide Mountain, the region's premium transmission site.
KZZF has stayed on Slide Mountain since then, but it took Mother Nature to make the site permanent.
"By the grace of God, the tower on Slide Mountain blew over," Millard said. "If the tower had not blown over, there would not have been space for us."
The main transmission tower on Slide Mountain carries six radio stations and many cell phone relays. The replacement tower had space for KZZF/KPTL.
Millard paid $140,000 for new transmission facilities but saved $125,000 because he did not have to build his own tower.
KZZF has a new transmitter, new antenna, new coaxial cable and new wiring for the larger transmitter, which can send the signal far into the San Joaquin Valley.
"What you ended up with was a very strong signal in the Reno/Northern Nevada market, which makes that a prize player for somebody," Millard said. "Right now the station is strong enough that all you need to do is hire a very good sales staff."
