Colleges Seek Ruling on Contested Sale of KOCE

An Orange County community college district asked a Superior Court judge Wednesday to decide whether it did anything wrong in selling its public broadcasting TV station to a foundation controlled by local business executives.

Dallas-based Daystar Television Network, the nation’s second-largest Christian broadcaster and an unsuccessful bidder for KOCE-TV, sued Coast Community College District last month to force the district to sell it the station, saying it had made the highest offer.

“If we did something wrong, we want to know about it immediately so that we can correct whatever mistakes we might have made in the process,” George Brown, president of the district board of trustees, said in a news release.

Richard Lloyd Sherman, Daystar’s attorney, said he hadn’t seen the district’s cross-complaint, but he was confident the court would force the district to sell the station to his client. “To the extent they’re asking the court to make a determination, that is their way of rectifying the wrong they’ve done,” he said.

The trustees, under strong local pressure, voted in October to sell the Public Broadcasting Service affiliate to the KOCE-TV Foundation for what was announced as $32 million, with $8 million down and the rest paid over time with interest.

But during negotiations, the deal changed substantially. The district lowered the price by $4 million, saying that was how much it would have had to pay if the station had been sold to a non-PBS bidder. The deal still includes the down payment, but the balance is to be paid over 30 years, with no interest. No payments are due for five years.

Daystar offered $25.1 million cash. The district rejected an increased offer of $40 million cash because it arrived late.

Trustees, frustrated at the length of time it has taken to complete the sale, have set a Wednesday deadline to complete the deal, a month later than the original target date.

The district’s cross-complaint asks the judge to sort out the myriad questions in the sale, such as whether the process was correct, determining the meaning of “highest responsible bidder” and “cash,” and whether the district is required to sell the station to a bidder that will retain the PBS affiliation.

The suit also asks the judge to determine whether the Corp. for Public Broadcasting, a nonprofit created by Congress to support public TV and radio stations, can sue for damages, an issue that has hung over the sale for months. The nonprofit had threatened to sue the district for the $22.5 million in grants it had given KOCE if it were sold to a non-PBS bidder, one reason trustees cited for selling the station to the foundation.