Audacy Settles Case Of Unpaid Local Taxes

Audacy said it has reached a $1.4 million settlement with Lower Merion Township, near Philadelhia, regarding a long-running legal dispute over alleged unpaid taxes.

After Audacy filed for Chapter 11 bankruptcy protection in January, Lower Merion was listed as an unsecured creditor, seeking about $11.7 million in local taxes and business taxes for the years when Audacy (which changed its name from Entercom in 2021) was headquartered in Bala Cynwyd. The audio content provider challenged the claim in a response on April 25 and Lower Merion's lawyers responded last week.

The Philadelphia Business Journal reports Audacy disclosed the settlement in principal in a court filing Friday. As part of the agreement, court documents said neither side admitted or conceded liability and both Audacy and the township will dismissed all actions against each other relating to tax assessments.

A status conference will be held June 20 in front of U.S Bankruptcy Judge Christopher Lopez in Houston. Neither Lower Merion Township nor its attorney in the matter respond to a request for comment.

Lower Merion’s allegations in the Audacy bankruptcy case are almost identical to those in litigation that had been ongoing in the Montgomery County Court of Common Pleas for the past five years. The township filed an assessment for unpaid business taxes against two Entercom subsidiaries in 2019. Entercom filed an appeal and then Audacy responded with a counterclaim. James Darden, a business tax compliance specialist for Lower Merion, said in a May 28 filing that the case never got out of the discovery phase partly because of pandemic-related delays but also because Audacy "has not moved the case forward."

According to court filings, Lower Merion sought what it claims are unpaid taxes with interest for the tax years 2012 to 2016 from two Entercom subsidiaries — Entercom Radio and Entercom Incorporated. Entercom Radio owned subsidiaries that operated Entercom radio stations — all located outside Lower Merion. Audacy argued in court filings that none of the bank accounts for which Entercom Radio deposited proceeds were located in the township. Entercom Incorporated was the company’s financing arm.

Lower Merion sought $4.03 million in unpaid local taxes for the years between 2012 to 2016 from Entercom Radio and $7.7 million in unpaid business taxes from Entercom Incorporated. That sum included a combined $3.1 million in interest. Darden said in a court filing that the township intended to amend its claim to include the tax years between 2000 and 2011, which total $2.27 million in unpaid taxes, $6.95 million in interest and a penalty of $227,053 for a total of $9.45 million.

There was no claim that the parent company, then called Entercom Communications Corp., did not pay its taxes. Audacy argued that unlike the company itself, Entercom Radio and Entercom Incorporated did not conduct business out of its former Bala Cynwyd headquarters at 401 City Ave.

The company relocated its corporate headquarters from Bala to 2400 Market St. in Philadelphia in late 2019, also consolidating its six local radio stations under that same roof — adult contemporary station B101 (WBEB-FM), classic hits station Big 98.1 (WOGL-FM), hot adult contemporary station The New 96.5 TDY, SportsRadio 94 WIP-FM, conservative talker 1210 WPHT-AM, and KYW Newsradio (now simulcast on 1060-AM and 103.9-FM).