New York - Air America Radio, the New York-based liberal talk radio network that in October filed for Chapter 11 bankruptcy protection, has seen its proposed $4.25 million sale to SLG Radio hit a roadblock, according to TheDeal.com.

The website reported that the Air America's unsecured creditors committee is objecting to the deal, claiming that the sale process is being conducted exclusively for the benefit of the company's debtor-in-possession lender, Democracy Allies.

The committee claims that Democracy Allies has backed out of a deal to use $500,000 from the sale's proceeds to pay unsecured creditors, while at the same time it would be paid back in full, with several of its insiders receiving minority stakes in the acquiring company.

The committee's arguments will be aired at a hearing on Friday.

Air America, which currently produces 19 hours of original programming a day and is heard on 81 affiliates, signed a letter of intent for the sale in late January.

Related Links:

http://tinyurl.com/2353tu (TheDeal.com)

http://www.airamerica.com