KSL Execs Took $3 Million in Company Loans16 Oct, 2013 By: Doug McPherson
ENCINO, Calif. – More ugly details have emerged in KSL Media’s bankruptcy proceeding: first, there was a report of a former controller who allegedly bilked millions from the company. Now MediaPost News says KSL still had enough cash to give top two executives large loans in what appear to be the company’s final months.
One exhibit KSL filed says founder Kal Liebowitz got a loan of $2.8 million and former CEO Hank Cohen took a loan of $207,000; both loans were listed as accounts receivables. The Chapter 11 documents don’t provide further details about the loans, including when they were made, how much, if any of the borrowed money was paid back or what if any interest terms are attached to the loans.
Other documents filed show that during the company’s last year in business, Liebowitz received nearly $1.1 million in payments from the company, including a twice-monthly salary of $22,750. And Cohen, who along with Liebowitz is listed as a “partial owner” of the company, received total payments of more than $922,000, including a twice-monthly salary of $24,750.
Meanwhile, other employees didn’t fare as well when KSL closed a month ago. MediaPost News says one former staffer says employees were told to attend an 11 a.m. meeting, where a bankruptcy attorney told them their jobs were gone. Staffers were then given their final paychecks and told to leave within an hour.
That source added that a month before operations closed, Liebowitz told staffers that “we’re going to be fine.” But bankruptcy documents show that by that time Liebowitz had decided to shutter the company.
When KSL lost the Bacardi account (the company’s largest, with $130 million in annual spending) in May, the source said the company became paralyzed. After that, the source said, “Hank was missing in action. He was never around and was always said to be traveling. Kal showed up once or twice in the last four months. There was no leadership. Lots of weird stuff was happening.”
KSL has reported it will take about six months to reconcile its accounts to determine exact amounts it owes. After that, payments will be made on “account of allowed unsecured claims of 67 percent of the available cash.”