Stokes in second appeal of bankruptcy

John Stokes is appealing the outcome of a 2009 bankruptcy case that saw his KGEZ radio station seized and sold off to Todd and Davar Gardner to satisfy creditors.

Oral arguments in what will be Stokes’ second appeal are scheduled for May.

Stokes voluntarily filed for Chapter 11 bankruptcy protection several months after a Flathead County District Court jury ordered him to pay $3.8 million for slandering the Gardners on his radio show.

The bankruptcy court converted the case into a Chapter 7 bankruptcy, requiring Stokes to liquidate assets to pay off creditors instead of giving him time to reorganize his finances.

Through that process, Todd and Davar Gardner bought the KGEZ radio station for $875,000 in the name of Flathead Broadcasting LLC. They later secured a broadcasting license from the Federal Communications Commission.

According to court records, that purchase satisfied Stokes’ other major creditor, Boone Karlberg Group, which had a first position mortgage and security interest in the radio station property.

As part of that settlement, the Gardners also agreed to reduce their claim from the defamation judgment against Stokes by $2.5 million.

Stokes lost an earlier appeal when U.S. District Judge Donald Molloy in Missoula affirmed both the bankruptcy court’s actions and settlement agreement.

Stokes has since appealed that ruling to the U.S. Court of Appeals for the 9th Circuit. Court records show oral arguments are scheduled for May 9 in Seattle.

Stokes referred questions about the appeal to his attorneys, Bob Barr in Atlanta, Ga., and Edward Murphy in Missoula. Murphy declined to comment, a worker in his law office said.

Todd and Davar Gardner are asking for Stokes’ appeal to be dismissed. They argue the settlement agreement was appropriate and completed 18 months ago.

“We feel it’s moot because everything has been done,” said attorney Trent Gardner of Bozeman, who is handling the case for Todd and Davar Gardner.

“But we also have no doubt that the bankruptcy court did the right thing in approving the settlement and that the district court was right in upholding the settlement.”

Trent Gardner said Todd and Davar Gardner have yet to receive any money from their defamation judgment against Stokes.

“They have not collected anything, not a single penny,” he said.

Kalispell city officials likely will keep an eye on the outcome.

Two KGEZ radio towers are a key part of any plan to upgrade the Kalispell City Airport to meet federal design standards.

The two towers must be removed, shortened or moved because they extend into what should be protected airspace. That’s something city officials say they could not negotiate to do when Stokes owned the radio station.

Reporter Tom Lotshaw may be reached at 758-4483 or by email at tlotshaw@dailyinterlake.com.