A maze of legal problems and bankruptcy leave the future of Kootenai County’s only broadcast station as fuzzy as the signal it offers viewers.
David Derryberry says he lost control of his dream - Channel 58 - last February.
The dream was to provide a television station with shows for North Idaho’s families. He made 30 round trips in a diesel pickup from the Los Angeles area and built Channel 58 from scratch.
It debuted April 1994, giving Coeur d’Alene its first television call letters: K58DQ. Viewers also find the station on cable Channel 21 in Coeur d’Alene - most of the time.
Central to the station’s legal woes is a dispute over who owns it. Derryberry’s business partners say he reneged on a deal to sell them the station. But Derryberry claims the local businessmen stole it from him.
The argument leaves the station in limbo. It’s also deep in bankruptcy, with former managers accused of accepting liquor and food in exchange for advertisements that never aired.
Channel 58 still shows Seattle Mariners baseball games and a bevy of religiousthemed talk shows and infomercials.
Whether it does so legally is up to the courts.
Derryberry, a Californian who develops FM radio stations, took on investors to get money for his dream. He says they soon conspired to oust him in November 1994, just a few months after Channel 58 started beaming sitcoms from Canfield Mountain.
One investor, Greg Linnebach of Post Falls, calls Derryberry “the most manipulative man I’ve ever known” and claims that the small group of station shareholders made a deal to buy the station and its Federal Communications Commission license from Derryberry.
Derryberry said Linnebach and others forged his name on the transfer papers.
One thing is clear: The partners formed Idaho Broadcast Network Limited Liability Co. on Feb. 1, 1995, and started to run the station without Derryberry, and without the FCC license. FCC officials last week said the license still belongs to Derryberry.
Seven days later, Idaho Broadcast Network filed for bankruptcy protection.
And for good reason. The station at the time owed $178,000 to dozens of creditors. Since then, the debt has nearly doubled, and there’s no end to the bankruptcy in sight.
A broadcast analyst from the FCC in Washington, D.C., Evette Keene, confirms that non-licensed operators of stations are breaking the law, subject to fines and jail time.
U.S. District Court Judge Alfred Hagan won’t ask Idaho Broadcast Network to offer a bankruptcy reorganization plan until the dispute over the license ends.
The paradox, said J. Richard Carr - a Maryland attorney with years of experience dealing with the FCC is that the FCC remains chronically understaffed and won’t touch stations in bankruptcy.
“They don’t have the resources, they don’t have the time to go out to a little low-power station in Idaho and shut down some unlicensed operator,” said Carr, who, on behalf of Derryberry, asked the FCC to intervene.
So the bankrupt station continues to show programs, and continues to lose money. Derryberry can’t come to the station because of a federal court order that prevents him from having anything to do with Channel 58.
“They’ve threatened to kill me if I try to come back up there,” Derryberry said. Linnebach, who stopped participating in the Idaho Broadcast Network a year ago and now is the pastor at the Set Free Ministry, dismissed that statement as mere fabrication.
Separating fact and fiction was the task of Mike Parkhurst, who worked at the station at the behest of the station’s largest shareholder.
“What I found up here was a snake pit,” said Parkhurst, who left the station this spring. A series of general managers under Idaho Broadcast Network’s control allegedly defrauded advertisers and helped themselves to thousands of dollars worth of free advertising for their own businesses, he said.
One former manager, Larry Steckman of Post Falls, did not return calls to his home or business.
According to Parkhurst, Steckman bought liquor, food and health club memberships with advertising “trade-out,” but often didn’t provide the advertising.
Several local businesses are listed as creditors in the Channel 58 bankruptcy file for thousands of dollars in “trade-out” deals where they didn’t receive advertising.
Even the current manager, Bob Rosier, is accused of using the station to air advertisements for his other business, Astrovision Private Cable, without reimbursement. Rosier could not be reached for comment.
The original investors of Channel 58 know their money is gone. Along with being bankrupt, the station faces lawsuits from distribution companies for hundreds of thousands of dollars.
Duane Jacklin, of Jacklin Seed Co. in Post Falls, bought 12 shares of Channel 58, worth at the time about $30,000.
But Jacklin knew from the beginning that it was more of an investment for the community, and not something to expect returns from, said Tom Stoeser, chief financial officer of the company.
“Frankly, we basically had written it off about a year ago,” Stoeser said. “But the reason Duane invested in it was because we liked the idea of a local television station, and because we felt there was a need and a niche for it.”
Derryberry is working through Republican Congressman Robert Dornan to put pressure on the FCC, and perhaps Attorney General Janet Reno, to regain control of the station.
Meanwhile, the bankruptcy continues, and Sandpoint bankruptcy attorney Ford Elsaesser - representing the Idaho Broadcast Network - said the outlook isn’t bright for a settlement between the parties over the license.
“The whole idea with this station was to help the people of Coeur d’Alene,” Derryberry said. “But those guys destroyed it.”