3 Seek to Force Bankruptcy on S.D. Channel 39’s Parent

DENVER —  Three bondholders of SCI Television, owner of KNSD-TV, Channel 39, in San Diego and five other stations, have filed a court petition to force the company into involuntary bankruptcy.

The Chapter 7 petition, which could result in the sale of the six television stations, was filed Thursday in U.S. Bankruptcy Court in Delaware. The petition also asks that a trustee be appointed to oversee the Denver-based company and “bring any appropriate suit against any third parties responsible” for SCI’s condition.

SCI Television, controlled by businessman George Gillett and the buyout specialist Kohlberg Kravis Roberts & Co., has been struggling under the weight of heavy junk bond borrowing incurred in its $1.3-billion buyout in 1987.

It missed payments of principal and interest last month, and proposed a restructuring under which bondholders would be given a 39% equity stake in the company in exchange for some debt forgiveness.

In a statement, SCI called the filing “an unfortunate diversion” from its talks with other bondholders about the restructuring.

It said the filing “will not in any way impair or affect the operations” of its TV subsidiaries, nor does it affect Gillett’s interest under a separate company in the Vail and Beaver Creek ski areas.

A Chapter 7 bankruptcy petition would require SCI Television to sell off its assets to satisfy creditors. SCI has 20 days to respond to the petition.

Besides the San Diego station, which is an NBC affiliate, SCI Television owns WSBK-TV in Boston, WJBK-TV in Detroit, WJW-TV in Cleveland, WAGA-TV in Atlanta and WITI-TV in Milwaukee.

The petition was filed on behalf of the investment firm S.N. Phelps & Co., based in Greenwich, Conn., and two individuals who said SCI Television failed to pay scheduled interest last month on about $180,000 in bonds that they hold.

SCI said in its statement that the missed interest payments to the three creditors amounted to less than $15,000.

The filing came hours after the end of a 30-day grace period for SCI to find a way to pay an Oct. 15 interest payment or restructure its debt.