Talk-radio host loses assets in bankruptcy

Whitefish Pilot

KGEZ shut down operations Sept. 24, and owner John Stokes was ordered to turn over all his assets to federal bankruptcy court.

A U.S. Bankruptcy Court judge ruled last week against StokesÕ bid to withdraw his Chapter 11 bankruptcy filing. Instead, the judge granted the bankruptcy trusteeÕs motion to convert the bankruptcy to Chapter 7.

That meant Stokes, who represented himself in the Aug. 13-14 bankruptcy hearing in Missoula, lost control of his assets. Stokes told Judge Ralph Kirscher that he would no longer be bankrupt once he won lawsuits he filed against Todd and Davar Gardner and his attorney in the GardnersÕ defamation suit against Stokes. He also claimed his radio station could not be closed until the Federal Communications Commission went through a public process.

But Kirscher was not persuaded by Stokes and pointed out inconsistencies in StokesÕ claims. Kalispell bankruptcy attorney Jim Cossitt, accompanied by Flathead County Sheriff Department personnel, posted the judgeÕs order on the radio stationÕs door. Cossitt was appointed the trusteeÕs representative in the case.

About a dozen staunch supporters showed up at the station. SheriffÕs deputies escorted about half a dozen employees and visitors off the premises without incident. Stokes has up to 10 days to request a hearing on the matter.

For about eight years, a dedicated group of opponents to StokesÕ message methodically recorded his broadcasts, contacted companies that advertised on KGEZ and wrote to the Federal Communications Commission in an attempt to shut him down.

The radio talk-show host piled up a long list of controversial actions, ranging from rallies in which green swastikas were burned along U.S. 93 to lawsuits and countersuits against neighbors and the state highway department. Stokes often called environmentalists Ògreen Nazis.Ó

In 1999, as the state made plans to widen the highway, a Montana Department of Transportation appraiser estimated the KGEZ property was worth about $100,000. But by 2001, Stokes had sued MDT, saying vibrations from highway traffic would damage his radio station and claiming his property was worth more than $2.5 million.

That was one of a dozen cases in Flathead County District Court that bore StokesÕ name. Neighbors Douglas and Ruth Anderson had sued to force him to bury cables to his antenna and erect a fence, as required by a 1949 easement.

And a lawsuit brought by Stokes, Skyline Broadcasters and Z-600 Inc. against the radio station's previous owners was settled out of court in January 2002. The terms of the settlement were not available.

By 2003, MDT had given Stokes and Anaconda attorney Wade Dahood $750,000. State law limited StokesÕ claim to 75 percent of what he sought, but he could claim the money before the reverse-condemnation case had settled so he could take steps to mitigate noise, vibration, dust and other impacts from construction and road widening.

Where that money went became an issue by 2004 as a case brought by Questa Resources, of Bigfork, moved forward in court. Questa had loaned Stokes $665,000 in April 2000 so he could purchase the AM radio station.

Questa claimed Stokes and others named in the promissory note failed to make a mortgage payment in March 2003. Stokes was declared in default in July 2004, and Questa sought $710,548 in principal and interest, plus attorneyÕs fees and other costs.

Judge Katherine Curtis ruled in December 2004 that Stokes could represent himself pro se, but the case would not be moved to federal court. She also noted that two of StokesÕ corporations had been dissolved for failing to file annual financial reports with the state, and she ruled that QuestaÕs claim to a security interest in the radio stationÕs license and broadcast equipment was valid.

By February 2005, however, the FCC had issued a Òred light dismissal,Ó meaning Stokes was delinquent in fee payments to the FCC. That caught the eye of area watchdog groups, as all Montana radio stations were undergoing the license renewal process at that time.

Stokes upped the ante in his reverse-condemnation suit in March 2004 when he claimed the state had conspired against him. He dramatically increased his claim against MDT from $1.1 million to $4.7 million. And in July 2005, Curtis denied the stateÕs motion to dismiss the $4.7 million claim.

According to MDT, Stokes settled his case against the highway department in November 2005, agreeing to take $400,000 for the 3,068 square feet of highway right-of-way next to the radio station.

But that meant Stokes had to pay back $350,000 from the earlier state pay-out. Questions remained about where the money went, and Questa Resources was talking about taking Stokes to court in an effort to get the $400,000 from the state for missing mortgage payments.

Foreclosure issues continued to bedevil the talk-show host. In February 2006, Eastlan Resources, a radio marketing company in Washington, tried to force a sheriffÕs sale, claiming Stokes owed them $5,750 plus 18 percent interest for back fees.

To compound StokesÕ problems, the Kalispell City Council by 2007 had taken up the issue of KGEZÕs two 325-foot tall radio towers, claiming they posed a safety hazard to the city airport, about a mile away.

By 2006, the AndersonsÕ easement lawsuit had fallen into the hands of Davar Gardner and his son Todd, who owns Gardner RV, after they purchased 65 acres of the AndersonsÕ land.

One year after Judge Stewart Stadler had ruled in September 2005 that the antenna cables must be buried, Stokes filed paperwork charging that Stadler had assured the Gardners a successful outcome prior to their filing a lawsuit. He called the Gardners Òcrooks.Ó

At a February 2007 hearing before Missoula County District Court Judge Robert Deschamps, the Gardners denied they had talked to Stadler about the case. Deschamps ruled against Stokes, who appealed the decision to the Montana Supreme Court, which also ruled against him.

By that time, Stokes claimed his property was worth $10.9 million. But as the deadline to bury the cables approached, Stokes began advertising the sale of his radio station and six acres of land for $4 million.

In March 2008, Judge Curtis ordered Stokes to pay the Gardners $90,000 in compensatory and punitive damages.

Meanwhile, down in Lake County, where Stokes lives, District Court Judge Kim Christopher ruled in favor of neighbors who objected to Nazi-themed signs Stokes had posted on his property.

Stokes contested the ruling, saying some of Donna and Peter PoeschelÕs motions were mailed to the wrong mailbox. He also claimed the Poeschels had tried to intimidate him by firing illegal machine guns, and he filed a countersuit for $5.6 million.

Fed up with derogatory comments allegedly made about them on KGEZ, the Gardners filed a defamation suit against Stokes in 2008. According to the suit, the Gardners claimed Stokes said they had lied under oath, submitted a false affidavit and committed bank fraud by obtaining a $900,000 loan under false conditions.

StokesÕ attorney said the comments were legal because they were protected as free speech under the U.S. Constitution, but the Flathead County jury disagreed. Stokes was ordered to pay the Gardners $3.8 million.

The defamation suit might have been the nail in the coffin for the talk-radio host, who filed for Chapter 11 bankruptcy in March this year. His filing also covered the two unregistered corporations Z-600 Inc. and Skyline Broadcasting, which Stokes in the past had dismissed as Òshell corporations.Ó

In April, Neal Jensen, the assistant trustee at the U.S. Trustee Program, in Great Falls, called StokesÕ financial statements ÒatrociousÓ and called for transferring the bankruptcy application to a Chapter 7 action. Among the unlisted liabilities in StokesÕ application were years of unpaid taxes, the GardnersÕÕ $3.8 million defamation judgment, unpaid loans and unrevealed creditors.

To add insult to injury, the GardnersÕ RV business, across the highway from the radio station, was hit by vandals in June. Thirty-two trailers and vehicles were spray-painted with profanity and messages tied to the defamation suit. Among the messages Ñ Ò3.8 mill,Ó ÒWhore$Ó and ÒLies will get you dead.Ó

But Stokes isnÕt done. On Sept. 3, Stokes announced he would file a perjury claim against Kalispell city attorney Charles Harball and file a suit against Judge Curtis alleging jury tampering that denied him a fair trial.