Radio Partnership With Crain Goes Sour For Fayetteville Businessman

A little more than two years ago, all was well between businessmen Larry Crain Sr. of Little Rock and Steve Renfro of Fayetteville.

Multiple disputes later, court documents paint a picture of a business partnership soured so badly that they can no longer work together — and well-known sports media personality Bo Mattingly is caught in the middle.

Washington County Circuit Court Judge Cristi Beaumont recently took the unusual step of ordering a company co-owned by Crain and Renfro — Capital City Broadcasting — be turned over to a receiver.

On Jan. 16, Beaumont appointed John Signaigo of Little Rock, a retired radio industry executive, as the interim receiver of CCB, an action taken as a result of a lawsuit brought by Renfro on Oct. 29 against Crain and related limited liability companies.

Among his many responsibilities, Signaigo has been instructed by Beaumont to take over the control, management and operation of CCB “until the court deems a receiver is no longer necessary,” according to court filings.

The company had previously been owned 50 percent by Crain Media Group LLC (Crain) and SK Media (Renfro).

In the order, Beaumont states, “The plaintiff [Renfro] on the one hand and [Crain] on the other hand clearly cannot work together to manage and operate CCB in accordance with the operating agreement, and, due to their multiple disputes as shown by the evidence, it is not reasonably predictable for the members or managers of CCB to carry on the company’s business in conformity with the operating agreement.”

Through their legal representatives, Crain and Renfro chose not to speak with the Northwest Arkansas Business Journal. Renfro is being represented by Fayetteville attorney Jason Wales. Charles “Skip” Davidson of Little Rock is the attorney of record for Crain.

Wales’ only comment about the case is that Renfro’s goal is to separate himself from Crain. He is hopeful that the court will “wind up the affairs” of the company, dissolve the LLC and order its assets liquidated, an action Crain’s attorney believes is “not necessary or proper,” according to court documents.

Signaigo, who also declined comment to the Business Journal, will remain in charge of the company pending a successful arbitration, which seems unlikely.

According to court documents, Crain offered to sell Renfro his interests in CCB for $1.2 million. He offered to buy Renfro’s stake in the company for $100,000.

Documents also show that on Jan. 30, Crain was cited by Beaumont for contempt for interfering with Signaigo’s efforts to act as the court-appointed receiver.

He was ordered to serve five days in jail, but the sentence was suspended.

In a statement, a spokesman for Crain said “Crain Media Group respectfully disagrees with the ruling and plans an appeal.”

Unilateral Operator

CCB began operating in December 2012, the result of a license reassignment filed by Crain with the Federal Communications Commission to shift ownership of one of his radio stations — central Arkansas-based sports talk station KKSP-FM, 93.3.

Crain, a well-known Little Rock businessman, has majority ownership in several diversified companies, including auto dealerships, auto parts distributors, and radio and television broadcasting interests through his Crain Media Group entity.

He remained the owner of CCB, but Renfro bought in as a shareholder, with a capital investment of $750,000 that made him a 50-percent owner of the company, according to court documents.

Renfro filed the lawsuit (and a motion to appoint a receiver) on Oct. 28, alleging Crain was unilaterally making all operational and financial decisions relating to CCB, almost from the beginning of the partnership.

One of the allegations, according to court documents, was that Crain merged finances and operations of another of his radio stations (KHTE-FM, 96.5) into CCB, a move that was beneficial for Crain but “financially detrimental to CCB and [Renfro].”

“Aside from not being approved by [Renfro], such a transaction also was clearly outside the ordinary course of CCB’s business,” the complaint stated.

Other allegations include Crain hiring and firing management of the radio station and failing to provide Renfro with CCB’s financial information in a timely manner.

According to the complaint, “Renfro and Crain disagree on the direction, management, finances and operation of CCB and, given [the] 50-50 ownership structure of CCB, such fundamental disagreements have resulted in CCB being deadlocked in the management and operation of its affairs. Despite this deadlock, however, Crain and CMG [Crain Media Group] have continued to manage and operate CCB as Crain sees fit and in the manner that is best for CMG without regard to the opinions or wishes of Renfro, who, according to the organizational documents of CCB, has just as much right to control CCB’s finances, operations, management, etc. as do Crain and CMG.”

Crain, according to court documents, denies the allegations.

Mattingly in the Middle

CCB, Renfrow contends, was formed specifically to own and operate KKSP, a 25,000-watt station which scored a coup when it was formed by luring the popular statewide show “Sports Talk With Bo Mattingly” away from KABZ-FM, 103.7.

The program, which originates from Fayetteville, airs weekdays from 2 to 6 p.m. Besides KKSP, it can also be heard on affiliate stations KSMD-FM, 91.1, in Searcy; KQSM-FM, 92.1, in Springdale; KTTG-FM, 96.3, in Barling; and KBCN-FM 104.3 in Harrison.

Mattingly, a Northwest Arkansas-based sports radio personality for nearly 20 years, also has a lawsuit pending against CCB. He filed on Dec. 9 after his show, which he owns through Sports Personality LLC, began to experience contractual difficulties as a result of the dysfunction in the Renfro/Crain partnership.

His attorney, James Graves of Fayetteville, said Mattingly did not wish to speak to the Business Journal, either.

A hearing in that case — also assigned to Beaumont’s court — is scheduled for Feb. 19 in Fayetteville.