“We tried to work everything out,” said Grant Merrill, who purchased KEWI-AM in 2011. In February, he left the station, and it was silenced. (Photo by Michael Pirnique)
The bad blood between the former partners of KEWI-AM, 690, has arrived at the Saline County Courthouse.
Curtis Arnold sued one of his former partners, Grant Merrill, over the way Merrill managed Saline County’s only radio station. The status of the radio station was the subject of an Arkansas Business story back in March, when Arnold telegraphed that he was considering suing.
According to the lawsuit filed earlier this month, Arnold invested $65,000 to buy the station through Saline River Media LLC. A third partner is state Sen. Jeremy Hutchinson, R-Benton.
Within months of the December 2011 purchase of the station, though, Merrill was already on his way to running it into the ground, Arnold claims in the lawsuit.
“Merrill systematically failed to pay company bills including taxes, FCC broadcasting fees, utility bills, and programming bills,” the lawsuit said. “All the while, converting company money for his own personal use.”
Arnold accused Merrill, who was profiled in Arkansas Business’ “20 in Their 20s” feature in 2009, of misleading him about the station’s financial condition.
During the course of the business relationship, “Merrill repeatedly made misrepresentations of material fact including but not limited to statements that Merrill was paying taxes … that in fact was not true,” the lawsuit said. “Arnold relied on those false statements and has suffered over a hundred thousand dollars in economic loss.”
Arnold is suing Merrill on several counts, including fraud and breach of contract.
In February, Merrill was forced out of the station. The lawsuit said he was paid $5,000 and allowed to keep the news website, Saline247.com, that was bought with company money.
Merrill said in an email to Whispers that he hasn’t been served with the lawsuit yet.
“It’s unfortunate anytime that disagreements have to enter the courtroom,” he said in the statement. “I’m hopeful and confident that I will be vindicated of all accusations.”
In March, Merrill told Arkansas Business that he had made some “rookie mistakes.”
He also said that he has “the utmost respect” for Arnold and Hutchinson. “Despite the fact that our business relationship is over, I still count them as friends,” Merrill said.
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