Lenders Accused of Preying on Black Radio

TAMPA (CN) - DB Zwirn Special Opportunities Fund and Black Enterprise/Greenwich Street Corporate Growth Partners conspired to "prey on distressed borrowers," particularly black broadcasters, WHYZ Radio claims in a federal class action. "As a result of the actions of the Zwirn defendants, roughly 20% of the radio broadcast licenses held by African Americans nationally have been impacted adversely," the complaint states.

WHYZ sued on behalf of "All persons and business entities located in the United States who at any time obtained financing from DBZ or its predecessor Highbridge/Zwirn Special Opportunities Fund who at the time of obtaining financing were insolvent or in a financial condition that made it clear they did not have the ability to repay the loan, but nonetheless were charged interest in excess of 38%, a balloon payment, negative amortization, prepayment fees, both cash interest and advance interest and fees [that] were financed as part of the loan payment, and the loan was made on the basis of an asset appraisal only with no consideration of the borrower's ability to repay or customary due diligence."

Here are the defendants: DB Zwirn Special Opportunities Fund LP, Black Enterprise/Greenwich Street Corporate Growth Investors LLC, Black Enterprise/Greenwich Street Corporate Management LLC, Black Enterprise/Greenwich Street Corporate Growth Partners LP, Straight Way Radio LLC, Bernard Radio LLC, Chris McMurray, Jeffery Scott, and Ed Williams.

Plaintiffs are represented by Charles Cherry II of Plantation, Fla. Cherry is also a plaintiff.

Lenders Accused of Preying on Black Radio

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