CHAPTER 11 Facing mounting debts of $23M, Percy Squire files for bankruptcy
By DAVID SKOLNICK
VINDICATOR POLITICS WRITER
YOUNGSTOWN -- A Columbus attorney with strong ties to the Mahoning Valley filed a Chapter 11 bankruptcy petition with a federal court listing $23.25 million in outstanding debt.
Even with that amount of outstanding debt to 27 entities, including the city of Youngstown, Percy Squire said he expects to have the matter resolved in the next 30 to 60 days.
"We're in a bit of a dispute," is how Squire describes his debt problem.
"We're going to file for reorganization," he said. "Our company is going to merge with another company, and we'll be bigger and better. I'm confident we'll emerge stronger."
That company is On Top Communications, a 6-year-old business that owns radio stations primarily in the southeastern portion of the country. That merger is subject to approval from the Federal Communications Commission as well as the implementation of a multimillion-dollar financing plan.
On his bankruptcy petition filed in U.S. Bankruptcy Court's Southern District of Ohio, Squire lists 15 creditors holding secured claims against his companies. Of the $20.26 million in secured claims, $14.27 million are owed to D.B. Zwirn Special Opportunities Fund of New York City.
Squire, along with Frank Halfacre -- a shareholder in companies owned by Squire and a disc jockey known as "Mr. Lucky" on WRBP, an FM station in Youngstown -- acquired a loan from Zwirn in February 2004 that was personally guaranteed by the pair.
Interest payments to Zwirn stopped in March 2005, and the company took Squire and Halfacre to federal court in New York. The company won judgment against them in a federal court in New York, but was still unable to collect the money it was owed.
During the process, Squire, Halfacre and four radio station companies owned by Squire filed for bankruptcy.
Squire said he doesn't have a dispute with any of his creditors except Zwirn.
"They wouldn't give us time to work this out," Squire said. "They are very predatory and very aggressive. They loan to own. They give the loan with the intent of taking assets. They find companies that are undercapitalized and take advantage of them."
David M. Hillman of the New York City law firm of Schulte, Roth and Zabel, which is representing Zwirn against Squire, said the Columbus attorney sought funding from the company with a personal guarantee to repay the loan.
"Zwirn has a duty to its investors to not turn a blind eye or ignore a situation where a debtor is in default of a $14 million loan," Hillman said. "He's in default, and that's not a disputed situation."
Squire said he will continue his Columbus law practice, as well as his radio station companies. One company is Stop 26-Riverbend, which operates three Youngstown stations, WRBP, and two AM stations, WGFT and WASN, out of the Wick Building on West Federal Street.
There have been numerous legal and financial problems with Stop 26 over the years, including Squire's failure to pay $150,000 to Youngstown in rent at the Wick Building. The city is listed on Squire's petition as a creditor holding unsecured priority claims against him for that amount.
"Stop 26 has had its ups and downs over the years," Squire said.
The 12 unsecured creditors include the IRS for $680,000 and the state of Ohio for $450,000.
He also owes $550,000 to Bricker and Eckler, a prominent Columbus law firm; $750,000 to Harold E. Kelley of Ashland, Ky., an investor; $1 million to Huntington National Bank and $1.5 million to Liberty Media Corp. of Englewood, Colo.
On his petition, Squire states he earns about $250,000 a year.
Squire was born and raised in Youngstown and is a 1968 graduate of East High School. Along with Robert Douglas, now a Youngstown Municipal Court judge, he won a federal lawsuit in the mid-1980s to create a minority-leaning Ohio House seat for the Youngstown area. Squire filed in 2001 to run as an independent candidate for Youngstown mayor even though he lives in Columbus. He pulled out of the race before the election.