Michael F. Thomson (#9707) Peggy Hunt (#6060) Megan K

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Michael F. Thomson (#9707) Peggy Hunt (#6060) Megan K. Baker (# 15086) DORSEY & WHITNEY LLP 111 South Main Street, 21st Floor Salt Lake City, UT 84111-2176 Telephone: (801) 933-7360 Facsimile: (801) 933-7373 Email: [email protected] [email protected] [email protected]

Attorneys for Mark Hashimoto, Chapter 11 Trustee

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF UTAH

In re: Bankr. Case No. 16-28578

RP BROADCASTING IDAHO, LLC, Chapter 11

Debtor. The Honorable William T. Thurman

MOTION FOR APPROVAL OF SALE TRANSACTION AND FOR AUTHORITY TO ENTER INTO ASSET PURCHASE AGREEMENT AND ANCILLARY AGREEMENT

Pursuant to section 363 of title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (the “Bankruptcy Code”), Rules 2002, 6004 and 9014 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), and the Local Rules of this Court, Mark Hashimoto, trustee of the above-captioned Chapter 11 bankruptcy estate (the “Trustee”), by and through his counsel, hereby moves this Court for entry of an Order approving the sale transaction (the “Transaction”) between RP Broadcasting Idaho, LLC, a Utah limited liability company (the “Debtor”), as seller, and Jackson Hole Radio, LLC, a Wyoming limited liability company (“Buyer”), as purchaser, in accordance with and pursuant to the Asset Purchase Agreement (the “APA”) attached hereto as

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Exhibit A and the ancillary Local Programming and Marketing Agreement, as amended by the First Amendment to Local Programming and Marketing Agreement, attached hereto as Exhibit B (the “LPMA”), free and clear of all interests, with valid interests in such property attaching to the net sale proceeds. In support hereof, the Trustee states as follows:

JURISDICTION AND VENUE 1. The Court has jurisdiction over this Motion pursuant to 28 U.S.C. §§ 157 and 1334.

2. This is a core proceeding pursuant to 28 U.S.C. § 157(b). 3. Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409.

STATEMENT OF FACTS

A. Procedural Background 4. On November 10, 2016, the Court entered its Final Order on Debtor’s Motion for Authority to Use Collateral [Docket No. 39] (the “Cash Collateral Order”), which provides that the Debtor’s pre-petition lender Chaparral Broadcasting, Inc. (“Chaparral”) “… holds a valid, enforceable and allowed claim as defined in section 101 of the Bankruptcy Code as of the Petition Date [September 28, 2016] in the amount of $1,910,000.” [Cash Collateral Order ¶ 1.a.].

5. During the Bankruptcy Case, Chaparral, unsecured creditor and radio tower lessor American Towers, LLC, unsecured creditor and real property lessor Hailey Hotel, LLC, and unsecured creditor and real property lessor Great Western Lodging, Inc. (collectively, the “Moving Creditors”) jointly filed the Joint Motion to Appoint Trustee [Docket No. 73] (the “Motion to Appoint Trustee”) and subsequently, the Debtor and the Moving Creditors jointly filed the Stipulation to Appointment of a Chapter 11 Trustee [Docket No. 87] (the “Stipulation”).

6. After consideration of the Motion to Appoint Trustee and the Stipulation, the Court entered its Order Directing the Appointment of a Chapter 11 Trustee, and on March 29,

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2017, the Trustee was appointed the trustee for the Debtor’s bankruptcy estate in this Chapter 11 Case and is currently serving in such capacity. See Docket Nos. 90 – 92.

B. The Debtor’s Operations 7. The Debtor operates and/or operated certain radio broadcast stations located in Wyoming and Idaho, consisting of (a) the following stations: KMTN-FM, KZJH-FM, KJAX- FM, and KSGT-AM, located in Jackson Hole, Wyoming; KECH-FM; KSKI-FM, and KYZK- FM, located in Sun Valley, Idaho; and KOUW-FM, located in Island Park, Idaho; and (b) the following translator facilities affiliated with the foregoing: K242BU, located in Jackson, Wyoming, K265DA, located in Teton Village, Wyoming, K239AU and K281BH, located in Driggs, Idaho; and K276DW, located in Ketchum, Idaho (collectively the “Stations”), pursuant to authorizations issued by the Federal Communications Commission (the “FCC”).

8. The broadcast licenses, permits and other authorizations issued by the FCC (collectively, the “Licenses”) for or in connection with the operation of the Stations were held by RP Broadcasting Idaho LS, LLC, a Utah limited liability company (“Idaho LS”) as licensee. Idaho LS is a “sister” affiliate of the Debtor by virtue of their common 100% owner Rich Broadcasting, LLC.

9. On June 21, 2019, the Court entered the Order Granting Motion for Approval of Sale Transactions and for Authority to Enter Into Asset Purchase Agreements and Ancillary Agreements [Dkt. 215], thereby authorizing the transfer of the Licenses from Idaho LS to the Debtor, and authorizing the sale and transfer of certain stations in Idaho to Magic Valley Media, LLC (together, the “Transactions”).

10. In order to assign the Licenses to any entity, the FCC must provide its consent to such assignment.

11. On July 22, 2019, the FCC consented to the Transactions, and the Transactions were consummated two weeks after the FCC consent orders became final, on September 17,

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2019. As a result of the closing of the Transactions, the Debtor is the licensee of the Jackson Hole Stations (as defined below) and owner of the Jackson Hole Stations Assets (as defined below).

C. Marketing of the Debtor’s Assets 12. Since his appointment, the Trustee has investigated and evaluated the Debtor’s operations, industry, and assets, including the Stations, and has marketed and solicited bids for the Debtor’s assets.

13. Specifically, the Trustee compiled a financial history of the Jackson Hole Stations for the years 2016, 2017, and 2018 which showed the monthly revenues and expenses of the combined stations during this three year period. In addition, a detailed listing of all of the equipment owned by the Jackson Hole Stations was also compiled into the financial package.

14. The Trustee communicated with three separate other potential buyers in the radio station industry inquiring about the potential sale of the stations. Each potential buyer was sent the financial information compiled, and the only other offer received for the Jackson Hole Stations was in the amount of $750,000; however, the terms of that offer were found to be unfavorable by the secured creditor, Chaparral, and therefore that offer was not accepted.

15. As for the fair value for the assets, since the stations have had negative cash flow during 2017 and 2018, an alternative method to value the Jackson Hole Stations is based solely on revenue generated. According to Greg Merrill of Media Services Group, a regional media broker, he suggested that an alternative method for valuing radio stations if there was not positive cash flow was 1 x annual revenue. During 2017, the annual revenue for the Jackson Hole Stations was $555,229 and for 2018 was $595,596. Thus, the current offer is fair and reasonable for the Jackson Hole Stations.

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16. As a result his extensive diligence and marketing efforts, the Trustee concluded that, in order to derive maximum value from the Debtor’s assets, the Stations, or subsets thereof, must be marketed and sold as a going concern.

D. The Proposed Transaction The Transaction

17. The Trustee and Buyer engaged in good faith, arms’ length negotiations resulting in the terms of the APA, through which Buyer will purchase the Debtor’s assets related to its stations in or near Jackson, Wyoming (the “Jackson Hole Stations Assets”). The Trustee believes that the transaction for the Jackson Hole Stations Assets represents the best available opportunity to maximize value as to such assets for the estate and all stakeholders.

18. Some key provisions of the APA1 include the following:

(a) Buyer will purchase all of the Debtor’s right, title and interest in and to all of the stations2 based in or near Jackson, Wyoming (collectively, the “Jackson Hole Stations”) and all related assets including the licenses, permits and other authorizations issued by the FCC pertaining to the Jackson Hole Stations, free and clear of liens, claims, encumbrances and other interests, with the exception of certain excluded assets. “Excluded Assets” include cash, rights to refunds and claims against third parties arising before the closing date, books and records, insurance policies and other identified assets.

(b) Purchase Price; Other Consideration. Buyer and its members shall pay and deliver the following purchase price and consideration, at Closing, in exchange for the assignment of the Jackson Hole Stations Assets from Seller (collectively, the “Purchase Price” or the “Closing Deliveries”):

(i) Five Hundred Fifty Thousand and No 00/100 Dollars ($550,000.00) to be paid (i) at Closing, or (ii) pursuant to the terms of a written promissory note (the “Promissory Note”) in form and substance acceptable to

1 Any summary of or reference to the APA in this Motion is qualified in its entirety by the APA itself. To the extent there are any conflicts between any summary or reference and the APA, the terms of the APA shall govern.

2 Such Stations are comprised of KSGT(AM), Jackson, Wyoming (Fac. Id. No. 10338), KMTN(FM), Jackson, Wyoming (Fac. Id. No. 10339), KZJH(FM), Jackson, Wyoming (Fac. Id. No. 65279), KJAX(FM), Jackson, Wyoming (Fac. Id. No. 82088), K242BU, Jackson, Wyoming (Fac. Id. No. 65280), K265DA, Teton Village, Wyoming (Fac. Id. No. 65281), K239AU, Driggs, Idaho (Fac. Id. No. 139608), and K281BH, Driggs, Idaho (Fac. Id. No. 139617).

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Chaparral Broadcasting, Inc. (“Chaparral”), and upon terms mutually agreed among Buyer and Chaparral;

(ii) an indemnification agreement (the “Indemnity”) in form and substance acceptable Chaparral and Jerry Lundquist, pursuant to which Buyer shall indemnify and hold harmless Chaparral and Mr. Lundquist from and against any liabilities to American Towers, LLC, including Buyer’s obligation to pay tower rent;

(iii) a security agreement (the “Security Agreement”) in form and substance acceptable to Chaparral granting to Chaparral a first-priority security interest in all assets of Buyer to secure Buyer’s obligations to Chaparral and Jerry Lundquist under the Promissory Note, under the Indemnity and otherwise;

(iv) a pledge agreement (the “Pledge Agreement”) in form and substance acceptable to Chaparral pursuant to which the members of Buyer pledge and assign to Chaparral a first-priority security interest in all of the limited liability company interests, membership interests, profits interests and all other rights and appurtenances to equity ownership to secure Buyer’s obligations to Chaparral and Jerry Lundquist under the Promissory Note, under the Indemnity and otherwise; and

(v) a personal guaranty (the “Guaranty”) in form and substance acceptable to Chaparral pursuant to which the individual anticipated to own and control Buyer shall personally guaranty Buyer’s obligations to Chaparral and Jerry Lundquist, upon terms mutually agreed among the guarantor and Chaparral.

(c) Buyer will assume all liabilities (i) arising from or after the closing under the Assumed Contracts, (ii) related to the Jackson Hole Stations Assets required to be paid after the Closing Date, to the extent associated with matters accruing after the closing date, (iii) and all other liabilities with respect to the Jackson Hole Stations Assets arising after the closing date.

(d) Among other things, the closing is conditioned on the FCC’s consent, the Court’s entry of a final order approving of the transaction, the closing of the transaction. 19. Among the features of the APA that are particularly beneficial to unsecured creditors and other stakeholders of the Debtor are: (a) the assumption and payment of certain assumed liabilities so that such liabilities will not dilute the pool of general unsecured creditor claims; and (b) the retention of claims and causes of action against third-parties, by and for the benefit of the Debtor’s estate.

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The Local Programming and Marketing Agreement3 20. In order to ensure the seamless transition of the Jackson Hole Stations Assets and all other assets related to the Jackson Hole Stations to Buyer pending the closing of the transaction and any further transaction negotiated by the Trustee, the Debtor and Buyer have entered into the LPMA.

21. Some key provisions of the LPMA include the following:

(a) Buyer will transmit programming to the Debtor, as the licensee of the FCC, and the Debtor will broadcast such programming, on the Jackson Hole Stations;

(b) For the broadcast of the Programs and the other benefits made available to Buyer, Buyer will pay Debtor as set forth on Exhibit A to the LMA, including expenses for certain utilities, licensing fees, insurance premiums, taxes, and regulatory fees, and Buyer is responsible to pay salaries and costs of personnel used in the production (but not the transmission) of programs, and delivery of programs to the Debtor;

(c) Buyer will sell advertising on the Jackson Hole Stations and be responsible for the collection of accounts receivable arising therefrom (the “Advertising ARs”);

(d) Buyer will be entitled to receive the Advertising AR outstanding on the date of closing of the transaction;

(e) Buyer’s programs will be compliant with FCC rules and regulations;

(f) Debtor will make available to Buyer all of the airtime on the Jackson Hole Stations for the Debtor’s programming;

(g) Debtor will provide access to and use of Debtor’s studio and office facilities located in Jackson Hole Stations’ market for purposes of providing the Programs; and

3 Any summary of or reference to the LPMA in this Motion is qualified in its entirety by the LPMA itself. To the extent there are any conflicts between any summary or reference and the LPMA, the terms of the LPMA shall govern.

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(h) Buyer will receive the benefits of the Jackson Hole Stations’ contracts and agreements and will perform the obligations of Debtor, as applicable, thereunder, but only to the extent of the benefits received. 22. The term of the LPMA is for a period of 12 months but may be terminated by mutual agreement of the parties. Because the purpose of the LPMA is to ensure continued programming and operation of the Jackson Hole Stations until the FCC provides its consent and the transaction is closed, the Debtor anticipates that the LPMA will terminate at such time.

E. The Sale of the Property Free and Clear of Purported Liens and Encumbrances 23. Other than the liens asserted by Chapparal, there are no known liens on the Jackson Hole Stations Assets. The Trustee has kept Chapparal apprised of his negotiations with Buyer, and Chapparal supports the Debtor’s entry into the APA, the LPMA, and the proposed transaction, in addition to the relief sought in this Motion.

24. As discussed in further detail below, the Trustee proposes to the sell the Jackson Hole Stations Assets free and clear of interests pursuant to 11 U.S.C. § 363(f), with any liens, claims, encumbrances, pledges, mortgages, security interests, charges, options, and other Interests that may be raised in conjunction with this Motion attaching to the proceeds of the sale, after the deduction of the costs of sale, outstanding taxes and assessments, and any costs that the bankruptcy estate has incurred in relation to the Jackson Hole Stations Assets that are allowable under 11 U.S.C. § 506(c) (the “Net Sale Proceeds”).

RELIEF REQUESTED 25. By this Motion, the Trustee seeks the entry of an order authorizing the Debtor to enter into the APA and the LPMA and approving the transaction contemplated thereby, including the sale of the Jackson Hole Stations Assets, free and clear of interests, with valid interests in the Jackson Hole Stations Assets, if any, attaching to the Net Sale Proceeds.

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ARGUMENT

A. Applicable Authority

1. Section 363(b) of the Bankruptcy Code. 26. Section 363(b) of the Bankruptcy Code authorizes the use, sale or lease of estate property in the ordinary course of a debtor’s business without further order of the court. See, e.g., Bagus v. Clark (In re Buyer’s Club Markets, Inc.), 5 F.3d 455, 457 (10th Cir. 1993) (“The Code takes cognizance of the fact that if a debtor had to seek court approval to pay for every expense incurred during the normal course of its affairs, the debtor would be in court more than in business.”). Conversely, when outside of the ordinary course of business, the Bankruptcy Code requires notice and a hearing. 11 U.S.C. § 363(b)(1).

27. In order to approve a sale of a debtor’s assets outside the ordinary course of business, the Trustee must show that:

a. a sound business reason exists for the sale;

b. there has been adequate and reasonable notice to interested parties, including full disclosure of the sale terms and the debtor’s relationship with the buyer;

c. the sale price is fair and reasonable; and

d. the proposed buyer is proceeding in good faith. See In re Med. Software Solutions, 286 B.R. 431-439-40 (Bankr. D. Utah 2002).

28. Ostensibly, and especially when the proposed transaction is not a sale of a debtor’s assets as is the case here, courts focus on whether a “sound business reason” has been articulated in good faith. See Committee of Equity Security Holders v. Lionel Corp. (In re Lionel Corp.), 722 F.2d 1063, 1071 (2d Cir. 1983) (identifying the “sound business purpose” test); In re Abbotts Dairies of Penn., Inc., 788 F.2d 143, 145-47 (3d Cir. 1986) (implicitly adopting the articulated business justification test with a “good faith” requirement); see also 3 Collier on

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Bankruptcy ¶ 363.02[4] (16th ed. rev. 2011) (“[C]ourts generally apply standards that, although stated various ways, represent essentially a business judgment test.”).

29. Courts generally defer to a debtor’s reasonable business judgment when it is “made in good faith, upon a reasonable basis, and within the scope of [its] authority under the Code” unless it is arbitrary and capricious. See In re Curlew Valley Assocs., 14 B.R. 506, 511-14 (Bankr. D. Utah 1981)(footnotes omitted).

2. The Use and Sale of Estate Property Pursuant to the APA and LPMA Is Warranted. 30. As set forth above, in order to approve a sale of a debtor’s assets outside the ordinary course of business, a trustee must satisfy certain factors, with the focus on whether a sound business reason exists for the proposed transaction. Here, the proposed transaction satisfies all four factors, as described below.

Sound Business Purpose 31. Courts show great deference to a trustee’s decisions. See Summit Land Co. v. Allen (In re Summit Land Co.), 13 B.R. 310, 315 (Bankr. D. Utah 1981). Additionally, a “presumption of reasonableness” attaches to the decisions of those controlling a debtor. In re John-Mansville Corp., 60 B.R. 612, 615-16 (Bankr. S.D.N.Y. 1986).

32. The Trustee submits that the proposed transaction, including the transfer of the Jackson Hole Stations Assets to Buyer pursuant to the terms of the APA, and the entry into the LPMA so that the Jackson Hole Stations may operate as a going concern, are based on sound business judgment.

33. The Trustee, after its informed diligence and evaluation of the Debtor and its operations, assets and industry, and after thoroughly marketing the Debtor’s assets, has concluded that operating and selling the Jackson Hole Stations together with all related assets, including the Jackson Hole Stations Assets proposed to be transferred under the APA, as a going

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concern, i.e., while continuing to broadcast programming as proposed under the LPMA, is the best means to maximize value for the Debtor’s estate. The Trustee already has determined that the transaction presents the highest and best offer for the Jackson Hole Stations Assets, and the LPMA is a necessary component of the transaction.

34. The Trustee has made an independent and informed decision based on his diligence of the Debtor and knowledge of its assets that the proposed transaction represent the best opportunity to maximize value for the Jackson Hole Stations Assets while minimizing further costs to the bankruptcy estate.

35. The proposed transaction pursuant to the terms of the APA represents a fair and reasonable price for the Jackson Hole Stations Assets based upon the Trustee’s research and diligence as to market conditions, the Debtor’s industry, and the nature and condition of its assets, in addition to the comprehensive marketing efforts of the Trustee.

36. Therefore, in his business judgment, the sale of the Jackson Hole Stations Assets pursuant to the terms of the APA and the LPMA are in the best interests of the Debtor’s estate.

Notice of the Proposed Sale Is Appropriate 37. The Trustee respectfully submits that the second prong of the four-part test has been met in this case because there has been adequate and reasonable notice to interested parties, including full disclosure of the material terms of all of the transaction.

38. Furthermore, the sale of the Property has been appropriately marketed in a fashion typical of property of this nature by the Trustee.

39. Concurrent with the filing of this Motion, the Trustee has served a notice of hearing on the Motion upon (a) all creditors, including Chapparal, and other parties-in-interest, (b) all parties who have requested notice in this case, (c) all parties who have submitted an offer to purchase the Debtor’s assets, (d) the FCC, (e) all counterparties to Assumed Contracts and (f) the office of the United States Trustee. The notice provides, among other things, notice of the

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hearing on this Motion, a description of the Jackson Hole Stations Assets and the material terms of the transaction.

40. The Trustee respectfully submits that such procedures are fair and reasonable, and afford notice as required under section 363 of the Bankruptcy Code and Bankruptcy Rules 2002 and 6004.

Fair and Reasonable Price 41. The Trustee believes that the sale of the Jackson Hole Stations Assets as proposed in the APA is fair, reasonable and will ensure that the estate obtains the highest and best price for the Jackson Hole Stations Assets. In his business judgment, the Trustee has received a fair and reasonable offer from Buyer to purchase the Jackson Hole Assets for $550,000.00, in addition to the assumption of all post-closing liabilities.

Good Faith Purchaser 42. The transaction was negotiated in good faith. 43. Although the Bankruptcy Code does not define “good faith,” the Tenth Circuit has determined, in the context of 11 U.S.C. § 363(m), that a “good faith” purchaser is “one that buys in good faith, and for value.” Tompkins v. Frey (In re Bel Air Assocs., Ltd.), 706 F.2d 301, 304, (10th Cir. 1983). Actions that destroy a purchaser’s good faith include “fraud, collusion between the purchaser and other bidders or trustee, or an attempt to take grossly unfair advantage of other bidders.” Id. at 305 n. 11 (citation omitted); see also In re Lotspeich, 328 B.R. 209 (10th Cir. BAP 2005).

44. Here, the Trustee has marketed the Debtor’s assets in a fashion typical of property of this nature. The APA represents an arm’s length transaction in which Buyer has acted in good faith, without collusion or fraud of any kind.

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45. The Trustee, acting as an independent fiduciary, extensively marketed the Debtor’s assets before concluding that the proposed transaction offered the most benefit to the bankruptcy estate.

46. Subsequently, the terms of the transaction were negotiated at arms-length with the Buyer. Additionally, the purchase price set forth in the APA represents a fair and reasonable value for the Jackson Hole Stations Assets and is significantly higher than what the Trustee believes he could recover in a liquidation or from any other sale transaction.

47. Finally, the APA and the LPMA and their respective terms are being fully disclosed to the Court and parties in interest.

48. Thus, the proposed transaction is an arm’s-length transaction ultimately resulting in the sale of the Jackson Hole Stations Assets to a good faith purchaser that is entitled to protection under section 363(m) of the Bankruptcy Code. Accordingly, the Trustee submits that Buyer is entitled to the protections of section 363(m) of the Bankruptcy Code and a finding that there was no fraud or collusion involved in the transaction.

The Sale of the Property Free and Clear of Interests Is Appropriate 49. 11 U.S.C. § 363(f) states that a trustee may sell estate property free and clear of interests, if:

(1) applicable non-bankruptcy law permits the sale of such property free and clear of such interest;

(2) such entity consents;

(3) such interest is a lien and the price at which such property is to be sold is greater than the aggregate value of all liens on such property;

(4) such interest is in bona fide dispute; or

(5) such entity could be compelled, in a legal or equitable proceeding, to accept a money satisfaction of such interest.

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50. Because Section 363(f) is in the disjunctive, the satisfaction of any one of the five enumerated requirements will warrant the Trustee’s proposed sale of the Jackson Hole Stations Assets free and clear of any and all Interests.

51. The only holder of any Interest against the Debtor’s property is Chapparal, and it has consented to the transaction, including the sale of the Jackson Hole Stations Assets under the terms of the APA.

52. Further, although the Trustee is not aware of any other party that claims an Interest in the Jackson Hole Stations Assets, to the extent any party does assert an Interest in such assets, satisfaction of any of the foregoing statutory requirements will warrant the Trustee’s sale of the Jackson Hole Stations Assets free and clear of such Interest. The Trustee reserves all rights to respond to Interests, if any, asserted in response to this Motion against the Jackson Hole Stations Assets, and in so doing, the Trustee reserves any and all claims and defenses that the Trustee, the Debtor, or the estate possess with respect to the Jackson Hole Stations Assets.

53. The Trustee submits that with respect to any Interest that may be asserted in conjunction with this Motion or the Jackson Hole Stations Assets, other than the Interest of Chapparal, (a) such Interest is disputed; (b) the property securing any such Interest may be sold under applicable non-bankruptcy law, such as under laws permitting Chapparal to foreclose on its senior Interest; and/or (c) the party asserting any such Interest could be compelled to accept a money satisfaction in legal or equitable proceedings such as in a judicial foreclosure proceeding by Chaparral to foreclose its senior Interest in the Debtor’s property under Utah law (see, e.g., Utah Code §§ 78B-6-901 to -909), whereby junior lienholders would be compelled to accept a money satisfaction or even no payment at all for their Interest, depending upon the value of the collateral.

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B. Assumption and Assignment of Executory Contracts and Unexpired Leases 54. Section 365(a) of the Bankruptcy Code provides that a trustee “subject to the court’s approval, may assume or reject any executory contract or unexpired lease of the debtor.” 11 U.S.C. § 365(a). Courts employ the business judgment standard in determining whether to approve the decision to assume or reject an executory contract or unexpired lease. See, e.g., In re HQ Global Holdings, Inc., 290 B.R. 507, 511 (Bankr. D. Del. 2003) (finding that debtor’s decision to assume or reject executory contract is governed by business judgment standard and may be overturned only if decision is product of bad faith, whim or caprice); In re Market Square Inn, Inc., 978 F.2d 116, 121 (3d Cir. 1992) (assumption or rejection of lease “will be a matter of business judgment by the bankruptcy court”); see also Orion Pictures Corp. v. Showtime Networks, Inc. (In re Orion Pictures Corp.), 4 F.3d 1095, 1099 (2d Cir. 1993). The “business judgment” test in this context only requires a demonstration that assumption or rejection of an executory contract or unexpired lease benefits the estate. See Sharon Steel Corp. v. Nat’l Fuel Gas Distrib. Corp., 872 F.2d 36, 40 (3d Cir. 1989). Any more exacting scrutiny would hinder the administration of the estate and increase costs. See Richmond Leasing Co. v. Capital Bank N.A., 762 F.2d 1303 (5th Cir. 1985).

55. Because the Jackson Hole Stations Assets are being sold as a going concern to Buyer, Buyer has identified which Assumed Contracts, in addition to the FCC licenses, it requires be assumed and assigned to it. Under the APA, the Debtor will assign its interests, if any, in the same contracts, in addition to the FCC licenses. Therefore, the Trustee’s determination regarding assumption is a sound exercise of business judgment because it aligns with the transaction. Given that consummation of the transaction is essential to maximize value of the Jackson Hole Stations Assets, assumption and assignment of the Assumed Contracts and the FCC licenses as designated in the APA constitutes a sound exercise of business judgment.

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56. The assignment of any Assumed Contracts and FCC licenses under the transaction requires compliance with the requirements of section 365 of the Bankruptcy Code, including section 365(b)(1) requiring the cure of any outstanding defaults under any of the Assumed Contracts to be assumed or providing adequate assurance that such defaults will be promptly cured.

57. The Trustee is not aware of any alleged defaults under the Assumed Contracts or the FCC licenses. If any defaults do exist as of the closing of the transaction, the Trustee anticipates that any such defaults will not be material and will be cured or waived. In addition, as set forth above, the transaction is conditioned on the consent of the FCC to the assignment of the licenses. Further, to the extent any particular Assigned Contract requires consent to assignment, the APA requires the parties to cooperate in obtaining consent from the respective counterparties to such contracts. See APA § 5.54.

58. In order to assign an executory contract or unexpired lease, Section 365(f)(2) of the Bankruptcy Code requires that “adequate assurance of future performance by the assignee of such contract or lease is provided.” 11 U.S.C. § 365(f)(2). The meaning of “adequate assurance of future performance” depends on the facts and circumstances of each case, but should be given “practical, pragmatic construction.” See In re Martin Paint Stores, 199 B.R. 258, 263 (Bankr. S.D.N.Y. 1996) (citations omitted)( “In the absence of any definition of ‘adequate assurance’ courts are counseled to give the phrase a pragmatic construction . . . At a minimum, the primary focus of adequate assurance concerns the assignee’s ability to fulfill the financial obligations . . “); see also Carlisle Homes, Inc. v. Azzari (In re Carlisle Homes, Inc.), 103 B.R. 524, 538 (Bankr. D.N.J. 1988) (citation omitted); In re Natco Indus., Inc., 54 B.R. 436, 440 (Bankr. S.D.N.Y. 1985) (adequate assurance of future performance does not mean absolute assurance

4 To the extent consent is not obtained by the closing of the transaction, the APA provides that the assignments thereunder shall to the extent permitted by law “constitute an equitable assignment . . . with Seller making available to Buyer the benefits thereof and Buyer performing the obligations thereunder on Seller's behalf.” Id.

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that debtor will thrive and pay rent). Among other things, adequate assurance may be provided by evidence of the assignee’s financial health and experience in managing the type of enterprise or property assigned. See In re Bygaph, Inc., 56 B.R. 596, 605-06 (Bankr. S.D.N.Y. 1986) (adequate assurance of future performance satisfied when prospective assignee of lease has financial resources and expressed willingness to devote sufficient funding to business to give it strong likelihood of succeeding).

59. To the extent that any defaults exist under any Assigned Contract or license to be assigned or assumed and assigned in connection with the transaction, the Trustee or Buyer will cause to be cured or provide adequate assurance of a cure of any such default prior to such assumption and assignment. Furthermore, if necessary, at or prior to the hearing on this Motion, the Trustee or Buyer will further present facts demonstrating the financial wherewithal of Buyer, its industry experience, and its willingness and ability to perform under the Assumed Contracts and the FCC licenses.

60. Therefore, the Court, contract counterparties and the FCC will have sufficient opportunity to evaluate and to be heard with respect to any disputed cure amount and to Buyer’s ability to perform in the future.

C. Waiver of Fourteen-Day Stay Under Bankruptcy Rules 6004(h) and 6006(d) 61. Pursuant to Bankruptcy Rule 6004(h), unless the Court orders otherwise, all orders authorizing the sale of property pursuant to section 363 of the Bankruptcy Code are automatically stayed for fourteen days after entry of the order. Similarly, under Bankruptcy Rule 6006(d), unless the Court orders otherwise, all orders authorizing the assignment of contracts or unexpired leases are automatically stayed for fourteen days after entry of the order. The purpose of Bankruptcy Rules 6004(h) and 6006(d) is to provide sufficient time for an objecting party to request a stay pending appeal before the order can be implemented. See Advisory Committee Notes to Fed. R. Bankr. P. 6004(h); Advisory Committee Notes to Fed. R. Bankr. P. 6006(d).

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62. It is in the interest of creditors and the estate that the transaction be consummated as quickly as possible without any stay pending appeal in light of the financial condition of the estate. The transaction requires Court approval and consent from the FCC as closing conditions. FCC consent to assignment of the licenses has been requested, but the Trustee does not know when the FCC will approve such assignment. During such time, the Debtor will need to continue operations of the Jackson Hole Stations to maintain their going concern value.

63. Delay of the approval of the transaction and the closing of the transaction could severely hinder the Debtor’s operations, reduce value and even cause lead to an inability to close the transaction, all to the detriment of the estate. On the other hand, expedited consummation of the transaction will preserve the maximum going concern value for all assets related to the Jackson Hole Stations and will minimize the ongoing operational costs to the benefit of the estate.

64. Moreover, as set forth above, the Trustee will provide adequate notice of the hearing on this Motion and the relief requested therein, to all of its creditors and other parties-in- interest, and therefore any person having any objection to the Motion will be afforded a reasonable opportunity to voice any objections or concerns. Accordingly, the Trustee is aware of no prejudice that would be caused by the Court’s waiver of Bankruptcy Rules 6004(h) and 6006(d).

CONCLUSION WHEREFORE, the Trustee respectfully requests that the Court enter an order: (i) granting this Motion; (ii) authorizing the Trustee to enter into the APA and the LPMA and to consummate the transaction contemplated thereby; (iii) authorizing the sale of the Jackson Hole Stations Assets, free and clear of all interests pursuant to 11 U.S.C. §§ 363(b) and (f), with any valid Interests in the Jackson Hole Stations Assets attaching to the Net Sale Proceeds; (iv) finding that Buyer is a good faith purchaser under section 363(m) of the Bankruptcy Code;

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(v) authorizing the assumption (where applicable) and assignment of the Assumed Contracts set forth on Exhibit C hereto; (vi) waiving the 14-day stay imposed by Bankruptcy Rules 6004(h) and 6006(d); and (vii) granting such other and further relief as is just and proper. DATED this 15th day of November 2019.

/ s / Michael F. Thomson Michael F. Thomson Peggy Hunt Megan Baker DORSEY & WHITNEY LLP Attorneys for Chapter 11 Trustee

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CERTIFICATE OF SERVICE – BY NOTICE OF ELECTRONIC FILING (CM/ECF)

I hereby certify that on this 15th day of November 2019, I electronically filed the foregoing MOTION FOR APPROVAL OF SALE TRANSACTION AND FOR AUTHORITY TO ENTER INTO ASSET PURCHASE AGREEMENT AND ANCILLARY AGREEMENT with the United States Bankruptcy Court for the District of Utah by using the CM/ECF system. I further certify that the parties of record in this case, as identified below, are registered CM/ECF uses and will be served through the CM/ECF system.

CERTIFICATE OF SERVICE – MAIL, OTHER

I hereby certify that on this 15th day of November 2019, I caused to be served a true and correct copy of the foregoing MOTION FOR APPROVAL OF SALE TRANSACTION AND FOR AUTHORITY TO ENTER INTO ASSET PURCHASE AGREEMENT AND ANCILLARY AGREEMENT as follows:

Other – By Electronic Mail, addressed to:

Scott Andersen – [email protected]

Mail Service – By regular first class United States Mail, postage fully pre-paid, addressed to:

Federal Communications Commission Michael Wagner 445 12th Street, SW Federal Communications Commission Washington, DC 20554 445 12th Street, SW, RM TW-A325 Washington, DC 20554 Marlene Dortch, Secretary Federal Communications Commission 445 12th Street, SW, RM TW-A325 Washington, DC 20554

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RP Broadcasting Idaho, LLC Century Link Attn: Mark D. Hashimoto, Chapter 11 PO Box 91155 Trustee Seattle, WA 98111-9255 7050 Union Park Avenue Suite 140 Century Link Salt Lake City, UT 84047 100 CenturyLink Drive Monroe, LA 71203 Jackson Hole Radio LLC PO Box 100 CenturyLink Communications, LLC Jackson, WY 83001 c/o CT Corporation System, Registered Agent 1108 E South Union Ave. Midvale, UT 84047 Teton Communications, Inc. Attn: Tony Hafla, President Chaparral Broadcasting, Inc. 545 South Utah Circle Attn: Jerrold T. Lundquist, President Idaho Falls, ID 83042 P.O. Box 9498 Jackson, WY 83002-9498 Jerry T. Lundquist PO Box 6165 1645 Gannett Road John F. Garziglia Jackson, WY 93002 Womble Bond Dickinson (US) LLP 1200 19th Street, NW Washington, DC 20036

/ s / Michelle Montoya

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EXHIBIT A Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 23 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 24 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 25 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 26 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 27 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 28 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 29 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 30 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 31 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 32 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 33 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 34 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 35 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 36 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 37 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 38 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 39 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 40 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 41 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 42 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 43 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 44 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 45 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 46 of 116

Schedules

Schedule 1.1(a) FCC Licenses Schedule 1.1(b) Tangible Personal Property Schedule 1.1(c) Assumed Contracts Schedule 1.1(d) Intellectual Property Schedule 3.4(c) FCC Regulatory Fees Schedule 3.10 Litigation Schedule 6.5 Consents and Releases

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Schedule 1.1(a) FCC Licenses

Main Station Secondary Station Facility ID Community of File Expiration Call Sign Call Sign Number License Number Date KJAX(FM) 82088 Jackson, WY BLH-20121219AAP 10/1/2021

KMTN(FM) 10339 Jackson, WY BLH-19850617KC 10/1/2021

KZJH(FM) 65279 Jackson, WY BLH-19890714KA 10/1/2021

KSGT(AM) 10338 Jackson, WY BZ-20091204AEI 10/1/2021

K242BU 65280 Jackson, WY BLFT-20090 l 28AAZ 10/1/2021

K265DA 65281 Teton Village, Etc., ID BLFT-19939823TC 10/1/2021

K239AU 139608 Driggs, ID BLFT-20070822ADX 10/1/2021

K281BH 139617 Driggs, ID BLFT-20110929AKC 10/1/2021

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Schedule 1.1(b) Tangible Personal Property

I. KZJH & KJAX Combined Transmitter Site (Snow King Mountain)

Continental transmitter 816R-3B 25KW KZJH NiCom NLR900 STL Receiver KZJH NiCom NLR 900 STL Receiver KJAX Gentner YRC-100 remote control system Gentner YRC-1000 Battery Backup Gentner YRC-1000 Remote interconnections Gentner YRC-1000 Cable tray Gentner YRC-1000 Fail Safe system Energy Onix Model SST-1000 transmitter KJAX Energy Onix power modules 4 each Line Dryer System

KZJH & KJAX Combined Tower and Antennas

14 Bay Dielectric Antenna KJAX 8 Bay ERI Antenna KZJH 6ft Mark grid STL Dish

II. KMTN Building Transmitter Site (Snow King Mountain)

Continental 816R-2B Transmitter Energy Onix Exciter SST-30 LCDS Relay Panel RP-8 made by Sine Systems NiCom NLR 900 STL receiver Energy Onix SST-100 Translator from KSGT to K242BU 14 Watts output Inovonics 716 Processing Amplifier for K242BU Translator

KMTN Tower and Antenna

6 Bay Dielectric FM antenna with no radomes

III. KSGT AM Tower Site

Gentner VRC-100 remote control system Gentner VRC-1000 Battery Backup Gentner VRC-1000 Remote interconnections Gentner VRC-1000 Cable tray Inovonics Processor model222 Nautel Am broadcast transmitter B178A Jazz J1000 Broadcast Transmitter

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IV. Jackson Studio Building

KJAX on-air Control Room

Arrakis 10 Console 2 each RE20 microphones with booms Simian on-air automation software 2 each Dell computers, one of which is running the automation software Dyno Global Storq Automation software Sony CD player CDP -XE370 2 Hafter audio monitors Antee Desk Computer Dell Slimline Inspiron 660s Computer

KMTN On-Air Control Room

Arrakis 10 Console RE 20 microphone Sennheiser Microphone Simian on-air automation software Optiplex 7010 computer running automation software Dell XPS 400 streaming computer Samsung 70000:1 monitor 2 each Hafler audio monitors Sherwood receiver/amplifier RX-4 108

STL Equipment Rack

TFT Modulation monitor 884 Dayton Industries EAS receiver Omnia program processor KSGT TFT EAS 940A EAS receiver NiCom NLS 900 STL transmitter Omnia program processor KSGT Omnia program processor KZJH Omnia program processor KMTN Belar AM RF amplifier TFT Model 923 AM Monitor Inovonics Model 718 audio program processor KJAX NiCom NLS 910 transmitter NiCom NLS 910 STL

KZJH On-Air Control Room

Arakis Systems ARC-8 audio mixing board RE 20 Microphone Sherwood receiver amplifier RX-4 108 Stanton C-500 CD Dual Disc Player Simian on-air automation software

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2 each computers one of which is running Simian software 2 each Hafter audio monitors Behringer microphone Sennheiser Microphone Sherwood receiver amplifier RX-4 108 Dell Optiplex 7010 Dell Slimline Inspiron 660s computer ASUS computer monitor Samsung Monitor Syncmaster E2420

KSGT On-Air Control Room

Arrakis 10 Console Sennheiser microphone Simian on-air automation software 2 each computers Dell and HP Pavillian Slimline Two each audio control monitors (no name) Dell Slimline Inspiron 660s Computer Gateway Monitor

Production Room A

Mackie 1402 VL23 Mixing Board Sennheiser microphone 2 each Edirol audio monitors MA-1OD Sherwood receiver amplifier RX-4 108 Gateway Slimline Computer and monitor Sony FM/AM portable receiver Sony Disc PlayerCDP-Xe50

Production Room B

Mackie 1402 VLZ audio mixing board Sennheiser microphone 2 each Edirol audio monitors 3 Sherwood receiver amplifier 4 Acer Computer and monitor Tascam cassette player 112 MKII Technics Compact Disc Player SL-PG4

Office Area A

HP Color Lazerjet 2600n printer Dell Slimline Inspiron 660s Computer ASUS VH232 computer monitor

Office Area B

HP Office Jet 6500A Plus

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Dell Slimline Inspiron 660s Computer ASUS VH232 Computer Monitor Dell Desktop Computer HP Laser Jet P2055dn

On Air Personality Work Area

2 each Dell Slimline Inspiron 660s Computer 2 each ASUS VH232 Computer Monitor Brother MFC 9970CDW Printer VISIO Razor LED 48" wall monitor

Jackson Studio STL Dishes

3 Scala Antennas

Misc Equipment

Nicom STLTSL 910 Nicom STL RSL 900 Comrex Link

Additional Equipment at .Jackson Hole

47" Vizio TV Brother Printer/Fax/Scanner Small Arrakis Board for KSGT 3 Arrakis ARC-10 Studio Boards for KJAX, KMTN, and KZJH Yamaha Stagepass 400i Soundsystem 3 Dell Optiplex 7010 computers for on-air studios Dell Optiplex 7020 Voicetrack Computer 1 Dell Optiplex 9020 office computer 6 Dell Inspirion Computers 1 Dell laptop 9 Computer monitors

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Schedule 1.1(c) Assumed Contracts

1. Relay Ridge Broadcast Tower Space Lease dated February 1, 2019, between Teton Communications, Inc. and RP Broadcasting Idaho, LLC.

2. Century Link account nos. 3077345004, 3077340922, and 3077320499.

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Schedule 1.1(d) Intellectual Property

Call Signs

KJAX KMTN KZJH KSGT K242BU K265DA K239AU K281BH

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Schedule 3.4(c) Regulatory Fees

None.

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Schedule 3.10 Litigation

None.

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Schedule 6.5 Consents and Releases

None.

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EXHIBIT B Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 93 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 94 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 95 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 96 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 97 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 98 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 99 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 100 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 101 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 102 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 103 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 104 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 105 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 106 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 107 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 108 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 109 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 110 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 111 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 112 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 113 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 114 of 116 Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 115 of 116

EXHIBIT C Case 16-28578 Doc 222 Filed 11/15/19 Entered 11/15/19 14:52:38 Desc Main Document Page 116 of 116

Assumed Contracts

1. Relay Ridge Broadcast Tower Space Lease dated February 1, 2019, between Teton Communications, Inc. and RP Broadcasting Idaho, LLC.

2. Century Link account nos. 3077345004, 3077340922, and 3077320499.

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