Broadcasters Drop Bid to Force Rubin Bankruptcy

A coalition of broadcasters has abandoned efforts to force Tom Rubin & Associates into involuntary bankruptcy over hundreds of thousands of dollars that the group claimed it was owed by the politically connected Studio City ad agency.

The group’s agreement with Rubin to drop the case ends what appears to be the longest involuntary bankruptcy proceeding in Los Angeles history. It was filed in February, 1981, by 10 broadcast stations and backed by 32 others that helped cover costs.

The case has generated an estimated 10,000 hours in lawyers’ time, untold thousands of dollars in legal fees and a blizzard of paper work, yet it never came to trial.

Daniel Slate, a lawyer representing Rubin creditors all over the country, said the case became too expensive to continue. But Gary Klausner, an attorney for Rubin, said the creditors quit because they felt Rubin would win. Thomas E. Rubin, 38, the agency’s owner, couldn’t be reached for comment.

In an order entered July 30, Rubin’s creditors agreed to drop their case with prejudice, meaning they can’t file it again, although they can pursue their claims in other courts. Rubin in return agreed not to sue the creditors for court costs and legal fees.

But the end of proceedings in U.S. Bankruptcy Court doesn’t mean an end to litigation involving Rubin, who is now doing the media buying for the gubernatorial campaign of Los Angeles Mayor Tom Bradley. The agency also is locked in court fights with NBC and Metromedia, according to lawyers for both firms. Those cases have been in abeyance pending resolution of the bankruptcy proceedings.

Peter Szabo, whose Atlanta collection agency specializes in media accounts, has maintained that the Rubin agency owed broadcasters nationwide about $2 million, including $550,000 plus interest allegedly owed to the litigating stations and several others he represents. But Rubin has contended in court papers that the claims aren’t legitimate debts but are instead disputed sums arising from the stations’ failure to run his clients’ ads properly.

Szabo has said the creditors tried to force the Rubin agency into involuntary bankruptcy because they were stymied by court costs in trying to collect individual debts in other courts.

Besides their length, the court proceedings were marked by a 1981 letter from Sen. Alan Cranston (D-Calif.) to Judge John E. Bergener, who later removed himself from the case because of it. The letter said the senator knew Rubin well and attested to his character.