Luken Communications Allowed To Meet Current Payroll Despite Bankruptcy Filing; Arkansas Jury Assessed $47.4 Million "Fraudulent Transfer" Verdict Against Henry Luken

Wednesday, June 26, 2013
Henry Luken
Henry Luken

Bankruptcy Court Judge John Cook on Wednesday afternoon agreed to allow Chattanooga-based Luken Communications to make a payroll of $86,884 on Friday despite a filing for bankruptcy protection. The bankruptcy petition was filed Sunday after a federal jury in Arkansas returned a $47.4 million verdict against CEO Henry Luken for "fraudulent transfer."

Mr. Luken was the former CEO of Equity Media Holdings Corp., and he bought its Retro Television Network for $18.5 million. Bankruptcy Trustee Randy Rice said Equity Media was valued at $115.8 million just seven months prior to the Luken transfer.

The jury returned the whopping verdict on Friday, and attorney Jim Fields quickly filed for bankruptcy protection for the Luken firm.

At an emergency hearing, Matt Winn, Luken executive vice president, said it was necessary to meet the payroll to keep morale up among the 38 employees and keep the company afloat during a reorganization.

He said Luken operates five cable TV networks showing on 320 affiliate stations.

Mr. Winn said none of the payroll would go to company executives Henry Luken and Forrest Preston. 

Trustee Rice is among those asking to intervene in the case, and his representative was at the Wednesday hearing.

Henry Luken is listed as one of the creditors. The document says he is owed $17,718,127.

It says Mr. Preston, Life Care Centers of America executive of Cleveland, Tn., is owed $18 million.

Other creditors listed include Friends of the Festival, $45,000; Harris Corporation in Dallas, $156,456; Jim Owens Entertainment in Nashville, $431,156; Marex in Canada, $40,000; Peter Rodgers Organization in Los Angeles, $61,197; Decosimo accountants, $25,000; Adman Electric, $43,577; 8th Street Holdings of Chattanooga, $12,740; Entertainment Concepts of San Clemente, Calif., $45,000, and Anchors Construction of Chattanooga, $46,478.

Henry Luken launched Luken Communications in 2008 after he earlier made a fortune in the phone business. 

A conflict between Equity Media and Mr. Luken occurred in early 2009, and the lawsuit was filed against him in 2010.

Mr. Luken also heads Luken Holdings with over 40 properties in Chattanooga, including the former extensive properties of U.S. Senator Bob Corker. 

The Luken networks include RetroTV, The Nashville Network,  MyCarTV, Frost Great Outdoors (FGO), TUFF TV, PBJ  and My Family TV.

Woman In Critical Condition After Being Shot In The Face Near O'Rear Street Identified As Entwadina Phillips, 20

A woman who is in critical condition after she was shot while driving in Chattanooga on Saturday night has been identified as 20-year-old Entwadina Phillips . Just after  9 p.m. , the Chattanooga Police Department responded to reports of a person shot. Once on the scene, police located a female victim near the 2500 block of O'Rear Street suffering from a life-threatening ... (click for more)

Large Pothole On Holtzclaw Causes Damage To Multiple Vehicles Tuesday Morning

A large pothole at 600 N. Holtzclaw Ave. caused problems for multiple drivers on Tuesday morning. It appeared that a water main leak caused the damage. Officials quickly barricaded one lane against the curb. One motorist caught up in the quagmire said, "The damage was not light to vehicles which hit the pothole on Holtzclaw today during the morning 8 a.m. rush ... (click for more)

City Council Travesty

  City Council just voted for a seven-story downtown building in a district zoned for 48' height limit. Setback to the building behind will be 6'. This is to allow the current building owner access to their property to maintain it. What I do not understand is how in the fire district this proposed building is in can a parking deck seven stories tall not have alley access ... (click for more)

Roy Exum: My Garden In December

As the fallen leaves confirm today is the first of December, my monthly walk in life’s garden is more foggy than fun. In much-older times, good children would get a piece of candy on Christmas Day while bad ones would receive a lump of coal. So here are some things that deserve a helping of both: A PIECE OF CANDY to the amazingly few who can spy a nest of mistletoe high in area ... (click for more)

Vol AD Hart Says Bowl Talks Have "Accelerated"

KNOXVILLE, Tenn. – Tennessee athletic director Dave Hart, football coach Butch Jones and men’s basketball coach Rick Barnes took part in a press conference on Tuesday. Athletic director Dave Hart, football coach Butch Jones and men’s basketball coach Rick Barnes took part in the question and answer session. Here are the edited highlights involving Hart and Jones. ... (click for more)

No 1 Connecticut Overwhelms Lady Mocs, 79-31

At least 6,104 basketball enthusiasts got to see what the best women’s college basketball team in the country looks like Monday night at McKenzie Arena. The three-time defending national champion Connecticut Huskies won for the fourth time this season and 41 st game in a row with an impressive 79-31 victory over the Chattanooga Lady Mocs before the seventh-largest crowd in ... (click for more)