Audacy and Lower Merion finalize $2 million settlement over unpaid taxes

As it continues to work through bankruptcy proceedings, broadcaster Audacy will pay Lower Merion Township $2 million in a settlement resolving a claim made over unpaid taxes during the time the company was based in Bala Cynwyd.

That figure is $600,000 more than a previously reported $1.4 million settlement in the matter, which court documents indicated Audacy and Lower Merion Township agreed to last month. That settlement, however, had been “erroneously” recorded in the case’s docket, and hadn’t been approved by the Lower Merion Township Board of Commissioners amid ongoing negotiations, Township Manager Ernie B. McNeely said.

Township commissioners, however, approved the $2 million settlement in a committee meeting last week. Notice of the settlement was recorded Monday, and it has since been finalized, McNeely said.

Audacy declined to comment.

The settlement comes amid Audacy’s ongoing bankruptcy case, which was filed in January. Lower Merion was named as an unsecured creditor in the proceedings, contending in filings that Audacy owed it almost $12 million in unpaid taxes from a several-year period when it did business in the township. The company, formerly known as Entercom, left its Bala Cynwyd offices for Philadelphia in 2019.

In its filings, Lower Merion alleged that two branches of the larger Entercom Communications parent company owed it $4 million in local taxes and $7.7 million in business taxes, including interest, dating back to 2012. Audacy, however, argued that its subsidiaries “did not have a physical presence or employees in the Township,” and its bank accounts were not housed there.

Now, as part of the settlement, both Audacy and Lower Merion agreed to “dismiss all actions” relating to the tax assessments. According to the settlement, the agreement was made “without any admission or concession of liability by either party.”

Audacy is grappling with almost $2 billion in debt amid a substantial advertising slump. A reorganization plan for the company was approved in February, and an investment fund owned by progressive philanthropist George Soros is set to become its largest shareholder, should the deal be approved by the Federal Communications Commission.

At last week’s township meeting, Legal Affairs Committee chair Daniel S. Bernheim said that during talks with Audacy, the company presented “certain arguments,” and “some had merit, some did not.”

“I am sure that we might be getting a little bit less than we prefer, and they’re paying a little bit more than they would prefer,” Bernheim said. “Some might say that’s the formula for a perfect settlement.”