A Texas-based radio station network has been kicked off Vertical Bridge’s towers for ignoring its rent payments for years, forcing the company to take nine stations silent.
In February 2018, Vertical Bridge, REIT Inc. purchased 43 towers and the underlying property from High Plains Radio Network, LLC of Texas (HPRN). The purchase price was not published but was likely $16 million or more. It was a one-time income infusion for HPRN’s owner, Monte Spearman, to expand and support his broadcasting network of over 40 radio stations across six states.
The sale included a leaseback agreement for the towers with a monthly rent ranging from $750 to $3,000.
However, in a lawsuit filed four years later, Vertical Bridge alleges that HPRN stopped paying rent 11 months after they signed the 2018 master lease agreement. The complaint, filed in the Fifteenth Judicial Circuit in Palm Beach County, Florida, alleges that HPRN breached their contract and was a telecom squatter on their structures, owing them $1.8 million in lease payments, plus attorneys’ fees and interest.
Vertical Bridge claims HPRN has repeatedly failed to make payments “in a timely and consistent fashion.”
The towerco said that almost every time it reached out to HPRN to request payment, the broadcaster “made excuses for why the payment was delayed and promised that Vertical Bridge would be paid following the close of various shifting deals HPRN was attempting to close.”
Those deals never came to fruition, and HPRN filed for Chapter 11 Bankruptcy on March 26, 2024, identifying Vertical Bridge as its largest unsecured creditor at $725,000, followed by American Express for $208,655.
Vertical Bridge has filed motions to force HPRN into a Chapter 7 Bankruptcy status that would require the broadcaster to liquidate its assets,
Although the bankruptcy filing halted Vertical Bridge’s Florida lawsuit, the towerco has filed a motion for relief from the stay, stating that the leases it relies on were terminated before the bankruptcy filing and are, therefore, not in effect.
HPRN asked the court to deny the motion, stating that the master lease agreement and settlement agreement were obtained through fraudulent inducement and duress, making them invalid.
The stations filing Silent STAs are: 690 KAFN, Benton, AR; 1240 KVRC, Arkadelphia, AR; 1310 KZYP, Malvern, AR; 1450 KVBV, Buena Vista, CO; 1490 KVWC, Vernon, TX; 1490 KZZN, Littlefield, TX; 99.7 KWPS-FM, Caddo Valley, AR; 100.9 KDEL-FM, Arkadelphia, AR; and 106.9 KYXK, Gurdon AR.
In a letter to the FCC accompanying each STA filing, Spearman wrote:
FCC Mass Media
Justification for Silent STA Requests
“This letter is the latest information update and filing date information, as to the progress or lack of progress with Vertical Bridge Tower Company concerning the ongoing tower lease issues.
After attempting for approximately a year to obtain any or all of the tower lease related issues resolved, and trying meet the needs of the lawsuit filed in the Florida court and simply because nothing had been resolved, including HPRN making numerous offers to settle and to rework the tower site leases for the future, only to have Vertical Bridge decide to not respond with any type of solution or account adjustments or even to attempt to fully review and fully discuss the various open issues, it was decided that the best direction for HPRN to go, was to file a form of bankruptcy.
HPRN was originally formed in the State of Texas, so the filing for Bankruptcy Sub-Chapter Five, was filed and processed in Texas on March 26 of this year.
We had the first creditors’ meeting on May 02 which only involved two other creditors and the Vertical Bridge attorneys. Again, HPRN detailed all the issues that needed to be addressed and there was a verbal statement from the VB attorneys that the issues would be reviewed by Vertical Bridge and that they would reply to us.
Since the creditors meeting, there has been continuous back and forth information between our attorney and through a new attorney for Vertical Bridge, causing constant issues to get the attorney up to speed with the issues, which as of this date, has resulted in no reply to properly resolve the issues and VB additionally has filed numerous motions that would force HPRN to be moved to a Chapter Seven Bankruptcy status.
HPRN has now been advised that we need to vacate all Vertical Bridge sites, causing the reasoning for the filing for temporary STAs that we will voluntarily turn Off-Air some stations temporarily and for the stations that we feel need to remain on the air but need to relocate to a temporary tower site. We will look at options for the silent stations and we will look to relocate the on-air stations to new tower site locations in the near future. We want to be fully transparent with the FCC and we want to keep everything properly filed as required.
While trying to work with Vertical Bridge over this last year, we have delayed in making these hard decisions and accept now that we should have acted sooner but need to make the changes now. Our hopes are to continue to serve the local small communities so that we can continue to be a true broadcaster that works directly with the FCC and to meet all the requirements. Please process the STA filings as needed so that all the stations are operating in proper order status.”